SafeSenda creates an alternative for P2P crypto transfers
SafeSenda, a crypto to naira exchange platform, which was founded in 2022 by Nkechi Iyke-Ukaegbu and Ikechukwu Ukaegbu, has fully launched operations in Nigeria. The startup offers users an alternative way to convert their crypto assets into local currency (as opposed to the dominant peer-to-peer (P2P) transfer system).
With this move, SafeSenda enters a crypto market filled with regulatory tensions and government scrutiny.
Background story
In Nigeria today, being a crypto holder can be a good enough reason to close your bank accounts and withhold the money in them. However, this was not always the case. In February 2021, Nigeria’s top bank pushed a nationwide order to bring crypto adoption to its knees. The order criminalized the handling of cryptocurrency, putting millions of Nigerians at risk.
With each passing year of the past decade, crypto adoption in Nigeria increased tremendously, eventually placing the West African giant at the forefront of crypto and Bitcoin adoption on the continent. While crypto experts and proselytes gleefully celebrated Nigeria’s growing use of cryptocurrency, the Central Bank of Nigeria (CBN) instructed all banks to “refrain from dealing in and with entities dealing in cryptocurrency.” The banks were also ordered to close the accounts of “persons or entities involved in cryptocurrency transactions in their systems.”
Perhaps the most interesting thing about the CBN’s move is that the number of crypto holders in Nigeria seemed to increase from 10 million the previous year to 13 million in 2022. However, these 13 million Nigerians cannot exchange their cryptocurrency for cash directly. Instead, they rely on the P2P model, where one person transfers coins to another, and the recipient initiates a regular bank transfer to the seller.
Practical as it may seem, the P2P model is fraught with dangers. Some users may disappear from the platform after receiving crypto from others. Bank transfers are sometimes inefficient and subject to a third party. The P2P process is generally considered slow and risky, especially since it depends on other platform users.
These are the pain points SafeSenda is trying to solve by positioning itself as a secure way to convert crypto to naira.
Crypto companies like SafeSenda are not licensed to operate with Nigerian banks. And so the SafeSenda team has built an in-house model that bypasses the CBN’s regulatory hurdle to offer users a seamless crypto-to-naira exchange experience.
Speaking about the motivation behind the startup, co-founder Ukaegbu said they were inspired to build SafeSend because it made sense to solve some of the pain points of P2P commerce in Nigeria.
“Due to a hostile regulatory environment in Nigeria, most of the transactions in the growing crypto trading and forex market are done via P2P platforms. P2P is mainly for experienced hands, time consuming and can take anywhere from many minutes to up to 72 hours to complete.
The startup is currently at the MVP stage and is being bootstrapped by the founders.
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