Following Binance Uganda closure, Binance P2P makes strong inroads in Africa

The cryptocurrency exchange has given up on Binance Uganda, but the regional play remains strong

Following the announcement of a disappointing closure of a Ugandan subsidiary in October, Binance — the world’s largest cryptocurrency exchange — released a blog post yesterday indicating that another initiative, Binance P2P, is making strong inroads across the world’s second-most populous continent. 

Titled “P2P Merchants: Facilitating Freedom of Money in Africa,” the post highlighted the peer-to-peer trading program’s growth in the region throughout the year — most notably stating that Binance P2P has processed a total of $280 million equivalent local African currencies since March, when the program introduced coverage for the Nigerian Naira (NGN).

Binance also claims that the program allows local merchants in Nigeria, Kenya, South Africa, Egypt and Morocco to “earn between $30 and $350 per day” buying and selling cryptocurrencies to their peers with local fiat currencies. In a separate post, Binance also advertises that with Binance P2P, “it’s easy to run your own crypto trading operation.”

This update follows comments made by Binance CEO Changpeng “CZ” Zhao in May, where CZ called Africa an “untapped market” that features both significant opportunities, as well as unique challenges.

“We view the entire African market as a really key market,” he said. “I don’t think it’s very easy to buy cryptocurrencies in Africa right now overall, so we want to help improve that situation.”

In an interview with Cointelegraph in July, CEO of Nigeria-based exchange Yellow Card Chris Maurice offered a different view from CZ, indicating that growth is coming along handily:

“In terms of the crypto scene and everything, things are growing very rapidly, really across the continent, but specifically in Nigeria, South Africa, Ghana, and Kenya,” said Maurice.

Additionally, data indicates that usage in Africa is on the rise. Research firm Chainalysis released a report in September indicating that small value crypto transfers are up over 50% on the year across the continent. 

This is an especially promising development, given the potential for cryptocurrencies to significantly improve cross-border exchange and settlement across the continent.

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Crypto P2P adoption in Middle East stymied by politics and tech

Data published by Arcane Research suggests that major P2P crypto platforms have struggled to take off in Iran and Lebanon.

Data published by Arcane Research suggests that despite demand for peer-to-peer crypto trading platforms in the middle east, regulations and lack of infrastructure is slowing down adoption. 

But undocumented migrants in western countries have been making use of these platforms to send money back home.

According to an October report from the firm, peer-to-peer crypto trading volume, or P2P, across the Middle East and Northern Africa is roughly 15% what it was in late 2017 on major platforms LocalBitcoins and Paxful — or roughly $682,000 a week.

“In general, there are several centralized exchanges providing services in the more developed Arab states,” states the report. “However, other countries in the region do not have this exchange infrastructure, and also lack financial and political stability, but [have] not seen any notable crypto adoption on the P2P.”

There is demand for P2P services in Middle Eastern countries facing inflation, as it allows residents to get money out of the country or simply convert to crypto. The Lebanese pound has suffered massive inflation in 2020. And while Iran has been a hotspot for crypto miners due to the low cost of electricity, its currency has also been ravaged by crippling hyperinflation since the United States reimposed sanctions in 2018.

Despite this, P2P exchanges in both Lebanon and Iran are struggling to establish a foothold due to “poor Internet infrastructure and political regimes being negative towards Bitcoin.”

Instead, Arcane researchers found that “less sophisticated” Bitcoin (BTC) P2P trading methods have grown in the region during the same period, spurred by messaging apps like WhatsApp.

The report also indicated that undocumented immigrants living in western countries are turning to crypto to send funds home using gift cards in conjunction with P2P trading platforms when local laws make sending crypto more difficult.

In September, Paxful announced that it would no longer provide services in Venezuela due to regulations and sanctions related to the U.S. Office of Foreign Assets Control. Despite this the country accounted for 42% of the P2P volume across all of Latin America, which now sits at $4.3 million.

Arcane Research suggests Venezuelan immigrants have found “workarounds” to send money home  amid “clamp downs on cryptocurrencies and strict currency control.”

According to researchers, immigrants can purchase gift cards to any number of popular retailers like Amazon or just a prepaid credit card, and send a picture of it to family and friends abroad. The recipients could then sell it for Bitcoin using a P2P platform and convert it into local currency. The report stated that such a remittance method was fast and reliable, but incurred significant fees.

Bitcoin is also a good way to get money out of the country. “Bitcoin can be used as a capital flight tool for Venezuelans,” stated the report. “The hyperinflation is a huge problem for Venezuela and [has] caused over 10% of the population to leave the country.”

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P2P Bitcoin Volume Skyrockets – India Takes Lead

P2P Bitcoin Volume Skyrockets - India Takes Lead

Bitcoin peer-to-peer (P2P) trading has hit new all-time highs in 6 countries this week, with India taking the lead. The top countries are India with $3.4 million, Ghana with $1.7 million, the Philippines, and Argentina with $1 million each, Mexico with $700,000 and Egypt with $150,000. P2P trading is a method of trading that involves […]

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Africa Posts Triple-Digit P2P Volume Gains in Three Months

Sub-saharan Africa now represents more than $15 million in combined weekly peer-to-peer trade following triple-digit growth over just a few months.

Peer-to-peer Bitcoin (BTC) trading has seen rapid growth in recent months, with the African continent now the second-strongest region in the world for P2P volume behind the U.S.

Africa was the sole region to produce an increase in seven-day P2P trade this past week — with sub-saharan African trade posting its seventh all-time high for weekly trade in nine weeks.

Since early January, the sub-saharan African has overtaken the Asia-Pacific, Eastern European, and Latin American regions to emerge as the second-strongest P2P market by a volume margin of more than 50%.

African P2P trade surges

Data posted to Twitter by crypto analyst Kevin Rooke on June 30 indicated triple-digit P2P activity among Africa’s top P2P markets over just three months, with volume increases of 125% in Nigeria, 194% in South Africa, 199% in Kenya, and 257% in Ghana.

Speaking to Cointelegraph, a spokesperson for top P2P Bitcoin marketplace Paxful noted that in addition to Africa’s top markets, Cameroon has emerged as a “breakout country” with $5 million in volume during 2020 so far.

Paxful attributes the dramatic increase in trade activity to its ethos of staying “connected to the streets” and fostering grassroots communities in developing markets:

“There’s no one catalyst for the recent significant jump in volume, rather it’s a result of a collective effort on the part of our various teams who have enabled us to successfully enter new markets like India and Argentina, build local communities (in Kenya, Ghana, South Africa, etc.) and form new partnerships.”

“With every new market comes an opportunity to improve and we plan to continue to focus on our users’ needs as a roadmap for growth,” Paxful added. 

US dominates P2P volume

Despite Africa’s meteoric rise, North America has further consolidated its lead in P2P volume with recent all-time highs for weekly trade exceeding $30 million.

Regional P2P trade volume

Regional P2P trade volume: UsefulTulips

The United States represented $30 million in trade by itself this past week, comprising nearly twice that of the entire continent of Africa. Paxful’s spokesperson noted that California is the strongest U.S. state for P2P trade year-to-date.

Nigeria is the second-strongest national P2P market, representing almost $10 million in weekly trade.

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