Luno’s trading volumes have dropped to a third of what they were previously following the Nigerian crypto ban that restricts banks from providing financial services to crypto exchanges in the country.
At the same time, low liquidity has seen bitcoin trade at a 46% premium on the exchange according to sources on the ground.
Speaking about this latest development, Marius Reitz, General Manager, Luno Africa, said:
“The letter from the [Central Bank of Nigeria] caused a market shock. Luno still has liquidity, but it is a third of what it was previously.
Now, as the price of bitcoin reaches new highs, because there aren’t as many people buying [or] selling bitcoin in Nigeria as there were before, it can lead to periods of low liquidity causing price spikes and dips.”
According to Marius, Luno does not set the price or any cryptocurrency on the platform, and these prices are determined by the supply and demand market forces.
Luno recently hit a milestone of 7 million customers globally, with the majority of its customers being in Africa.
Today, we’re celebrating the milestone of reaching 7M+ customers globally! 💫— Luno (@LunoGlobal) February 26, 2021
Thank you to all of you for your continued support and for helping us build a better financial system together. pic.twitter.com/XM8ZT71oCM
The Nigerian crypto ban is having ripple effects across the crypto industry and now seem to be affecting other African markets as well.
Recently, Binance closed the Kenya M-PESA funding option following Flutterwave’s move to comply with the Central Bank of Nigeria directive against offering services to crypto exchanges.
Other exchanges that are serviced by Flutterwave as their mobile money service provider, have similarly been affected.
RECOMMENDED READING: Binance Closes M-PESA Deposit and Funding Option Following the Nigerian Crypto Ban
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