While Nigeria relaxed its stance on cryptocurrencies in 2023, the government has now cracked down by banning several major exchange platforms, including Binance. A blow to the booming blockchain industry because of suspicion of naira manipulation. Yet Nigeria is reputed to have a crypto adoption of around half the population…
A surprise crypto ban following alleged manipulation of the naira, the national currency
This Wednesday, February 20, the Nigerian government sprang a surprise by ordering telecom providers to block access to the country’s main crypto platforms including Binance, Kucoin and Coinbase.
This abrupt decision comes a few months after the Central Bank of Nigeria (CBN) has authorized crypto transactions, signaling a sudden U-turn. The government justifies this backtracking by the need to combat alleged manipulation of the national currency, the naira.
Thus, in a message published on social networks, advisor to the Nigerian president, Bayo Onanuga harshly criticized Binance accusing it of contributing to the weakening of the naira on the foreign exchange market. In his view, cryptos should simply be banned in Nigeria.
In a column with the evocative title, ” The Naira-Dollar manipulators” the journalist Bayo Onanuga also denounced the alleged unpatriotism of Nigerians using these platforms. He therefore called on the national anti-corruption commission and the central bank to crack down quickly on crypto companies. Indeed, in his view, manipulation of the naira is taking place, and he wishes to defend Nigeria’s currency against external influences:
Binance defends itself against accusations of naira manipulation
Binance has rejected accusations of naira manipulation, stressing that its platform is not intended as a reference for exchange rates. The company has temporarily suspended certain transactions in order to avoid excessive volatility likely to distort prices.
However, by limiting the sale price of the stablecoin USDT to the floor price of $1 on its P2P platform, Binance has fuelled suspicions. Although the company refers to an automatic mechanism, some deliberate attempt to influence the exchange rate with the local currency.
On the user side, this regulatory change has caused consternation among Nigerian users. Many doubt that restricting access to certain sites will be effective in solving Nigeria’s economic problems, such as the structural weakness of the naira. Above all, the Binance mobile application remains fully usable, limiting the impact of blockages.
Conclusion
It should be noted that Binance had already received a formal notice from the Nigerian authorities last year. The local financial regulator pointed out that Binance Nigeria Limited, the local subsidiary, was neither registered nor regulated in the country. The regulator ordered Binance to cease its activities. in the country until further notice.
How will the regulation of cryptocurrencies evolve in one of the countries with the highest adoption in the world? Will the price of the naira against the dollar appreciate as a result of the new bans? What do you think? Follow us to stay up to date on this topic, we’re following blockchain & crypto news with you to bring these answers when they materialize!
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.
