US-based cryptocurrency expert and Chief Executive Officer of Paxful, Ray Youssef, joins TEMITAYO JAIYEOLA to discuss E-Naira, cryptocurrencies and their impact on countries’ economies
How do you think the government of countries like Nigeria can explore bitcoin?
The best option is for the government to accept any form of crypto, especially BTC, from people in exchange for naira. The government may ask people to go to any post office with their BTC or playing card to collect naira. They get people to work and collect BTC from them in exchange for the local currency.
It brings Forex into the country and the government can set policies around them and by doing so they can get other people to work as well. You can imagine when 50 million youth have to work through cryptocurrency, that will be a big transformation. The youth are already doing it, the government can only fix it, and it will stabilize the economy of this country. You will be surprised that with this act you will follow the whole world Nigeria.
The CBN restriction on cryptocurrencies drove traffic to P2P platforms like Paxful. Do you think lifting the restrictions will transform the Cruto market?
Volume might drop with reversal, but that’ll be great. I think what the government should do is embrace what the youth are doing. The greatest creator of opportunity is staring government in the face.
Why do you think more people should invest in cryptocurrency?
I’m not the best at investment advice. I created a platform using BTC technology to create an exchange that people can use to make money anywhere in the world. I advise people not to invest in cryptocurrency but to buy BTC and learn how to use it. While the whole world created BTC, the CBN of different countries created their fiat currencies and they are in control of it.
Nigeria is your biggest market, where do you see the market in the next five years?
The market for us and everyone in the room should grow five or ten times what it is now. There are few things that need to happen, we’re making a big push in education. We have built schools in Kaduna and we are building another four schools in the southwest and southeast.
We have an education center in Abuja and much more needs to be done to improve Bitcoin acceptance. When I landed here the official rate of Naira was N415 but now I can’t believe what the market is saying and that’s why more Nigerians are adopting cryptocurrencies like USDT, Ethereum and BTC that will get their money because of inflation.
Some of the people visiting our platform have shown us that BTC not only has historical value but is viewed as a store of value. They see their money in the bank as in a prison. For example, if you are in Nigeria and you want a credit card to buy something online in a global market, you need to get dollars from the black market to fund it, and every time you buy something with it you pay an installment to the official , which means you lose half of it. But if you are friends with CBN officials, you can buy at the official rate and sell on the black market and double your money. This means what I have called economic apartheid. BTC is a medium of exchange and you can have Paxful, a global financial platform. This revolution should be taken into the mainstream, for us it is no longer just an arbitrage market, the tune needs to change.
How would you describe the uniqueness of the Nigerian market?
The Nigerian market is quite peculiar, especially when it comes to users. Some people say that surviving in Nigeria is difficult, but it is still the largest economy in Africa and its population has a lot to do with it, especially the youth, which is its biggest selling point.
If you look at Nigerians outside of Africa, they are above average in several areas, which is very quirky and awesome. The youngsters have done two things: they have actually stabilized the price of naira as they bring in more forex, and they bring in BTC and other cryptocurrencies as well. Through all these crypto activities, they don’t take money from this country, they use it here and make more money. The specialty of the Nigerian market is that we have such a highly intelligent, energetic and genuine young population.
What do you think of the CBN e-naira?
The CBN e-Naira is a good initiative to introduce blockchain technology, but it is still naira and naira is depreciating rapidly. If the CBN wants it to circulate, it’s very simple, it should get all outlet operators to apply for credit. You will get many applications circulating the e-naira but the problem is people don’t want the naira out there.
What challenges does Paxful face?
If you look at my Twitter account, you will see a number of people saying that Paxful is withholding their funds. Many of these people are Nigerians and few of them are involved in any illegal activity so they have every right to complain.
We don’t take money from people, we’re an American company and we have a compliance guide. When the US government finds an irregularity, they ask us to suspend the account and we have to comply with regulators. We know they will get their money back but why wait a year because if the price of BTC falls they will lose.
Something has to change because that is our biggest problem at the moment. Issues like KYC are another challenge. Will you make KYCs for everyone if people find pieces of paper as a means of identification that are not visible for anyone to read? Nigerians want to be verified but some people just don’t have the right ID.
What is the focus of establishing your organization?
We’re donating now more than ever. We have built a total of 12 schools worldwide and we are building more schools in Nigeria. We already have two schools in the north, we are working on two schools in the west and two schools in the east. Personally I want to build my first school gift for children somewhere here in Nigeria and I want it to be ready within the next two years to make it the best school in Nigeria.
How do you see the use of technology to fight cybercrime?
Our users’ accounts are not suspended for fraud, but usually to comply with government regulations. Paxful needs to protect Nigerians from scammers. Some of these scammers come from countries like China. They can lie that the gift card they bought from Nigerians is bad. The truth remains that most of the bad guys are not Nigerians and that is why we are trying our best to protect Nigerians.
What is your message to some of the aggrieved subscribers on your platform?
Most of our users are satisfied. We may have about 0.5 percent that may not be happy, either due to instances of fraud or something else. When that happens, such people are usually vocal. Usually it is the problem with the gift card. You have no idea if a gift card code is good or not. The problem is that the gift card companies don’t have a public ledger to check against. only a private ledger, and 98 percent of the world’s gift cards come from two American companies.
What advice do you have for young people on the subject of financial education?
Financial education brings empowerment and entrepreneurship. Nigerian youth are leading a financial revolution and Bitcoin has already increased tenfold compared to other regions. We must nurture this momentum – it will open Nigeria to the global market, grow local businesses, expand opportunities for international freelancers and reduce Nigeria’s dependence on international governments that threaten to devalue local trade. Through Bitcoin, Nigerians will propel all of Africa into a financial golden age.
Bitcoin is more than just an asset. It is a testament to the power of Nigerians. With a high level of education but an unemployment rate of over 30 percent, you have shown the world how Bitcoin can break new ground while boosting the local economy. That gives strength.
Paxful was created as a global peer-to-peer financial platform where people can make payments, transact and send money by buying and selling Bitcoin as a medium of exchange. Paxful’s mission is to advance a truly global economy by building a financial system that serves 100 percent, not just one percent. Over ten million people use Paxful to buy and sell bitcoin with over 450 different payment methods – helping to connect people to virtually every financial network in the world.