Peer-to-peer (P2P) cryptocurrency traders and over-the-counter (OTC) dealers say Nigeria’s new virtual asset tax framework—which mandates a 1.5% stamp duty charge on digital assets—risks raising trading costs and potentially driving activity away from regulated exchanges and into less visible channels.
Joshua Adedeji, a Nigerian OTC bulk trader who said he processes about $500,000 worth of USDT—a dollar-backed stablecoin—weekly on cryptocurrency exchange Bybit, said the tax cost is far higher than his existing operating costs.
“Transfer charges were my biggest transaction costs before,” Adedeji said. “Now, stamp duty and other taxes [will account for] much higher costs, because the higher percentage of the tax is on transactions.”
The compliance burden will weigh heavily on crypto traders who rely on very small price differences to make money. Frequent stamp duty deductions increase the cost of moving money between wallets, exchanges, and customers, cutting into already thin margins for day traders and swing traders who buy and sell cryptocurrencies to speculate on price movements.
Adedeji said he typically earns about ₦0.5 ($0.00037) per USDT on spreads when trading cryptocurrencies. He processes transactions for over 100 customers weekly, according to him.
“The heart of P2P is the volume of transactions, which doesn’t necessarily translate into profit,” he said. “Taxing multiple points of transactions will definitely have a bad ripple effect on P2P.”
He expects trading volumes to fall sharply if the tax rules are enforced strictly.
“Volume of P2P will reduce drastically, because the margins of profit are slim, before even factoring in losses,” Adedeji said.