In the context of Nigerian authorities tightening management of cryptocurrencies, the International Monetary Fund (IMF) recommends that the country consider licensing international cryptocurrency exchanges to enhance economic stability. economy and position in the digital asset sector in Africa.

The proposal was made by the IMF in its latest consultation report for Nigeria. According to the report, exchange licensing and adherence to strict AML/CFT regulatory standards will attract foreign investment and improve the remittance process, especially important for the large foreign-born population live in Nigeria. The IMF also pointed to significant gaps in Nigeria's balance of payments, with a gap of up to $7.5 billion (2% of national GDP), mainly due to undeclared financial activities, often using cryptocurrency in cross-border transactions.

The IMF believes that, through appropriate regulation and licensing, cryptocurrencies will provide Nigeria with more secure and efficient transaction processing tools, increasing control over technical financial transactions digital currency, curbing illegal financial activities and minimizing the risk of fraud and money laundering related to cryptocurrencies. The report also highlights the potential of digital finance to support economic growth and improve access to financial services for the unbanked in Africa.

However, in recent weeks, Nigerian authorities have made significant moves to clamp down on the cryptocurrency market and P2P trading. The Central Bank of Nigeria is concerned about volatility in the foreign exchange market due to cryptocurrency speculation, especially “pump and dump” tricks in P2P trading. Recently, Nigerian regulators accused Binance of facilitating $26 billion in untraceable cryptocurrency trades, leading to the arrest of two Binance executives and the freezing of over 1,000 accounts banking involved in P2P transactions.

According to local reports, cryptocurrency traders in Nigeria are gradually going underground in response to these crackdowns. They are currently using informal channels like WhatsApp and Telegram for P2P trading, using non-custodial or self-custodial blockchain wallets to continue operating outside the scope of regulated exchanges.