Binance has removed Nigeria’s official currency, the Naira, from its peer-to-peer service. The decision comes amid recent efforts by the Nigerian government to stabilize the value of the Naira.
During a BBC interview aired on March 1st, Bayo Onanuga, the special adviser to President Bola Tinubu, disclosed the compensation request, highlighting it as a measure to stabilize the domestic currency. Onanuga cautioned that if left unchecked, Binance could severely harm the Nigerian economy by unilaterally setting foreign exchange rates.
The peer-to-peer (P2P) feature permits users, both buyers and sellers, to engage in trading without the need for intermediary involvement. This feature gained significant traction in Nigeria in 2021 after the government imposed a ban on the flourishing crypto industry during the tenure of former President Muhammadu Buhari’s administration.
Amid the swift depreciation of the naira and the subsequent emergence of an almost three-decade-high inflation rate of 29.9%, the government shifted its attention towards platforms offering cryptocurrency services. These online platforms have gained prominence for facilitating trade and setting an informal valuation for the naira.
Nigerian cryptocurrency enthusiasts previously encountered challenges accessing various crypto exchange platforms, such as Binance, OctaFX, and others. Shortly thereafter, Binance restricted the maximum selling price of Tether (USDT) tokens on its P2P platform, resulting in traders being unable to sell USDT for more than 1,802 naira per USDT.
Despite speculation within the local cryptocurrency community, the exchange clarified that the price limitation was a result of an automatic system pause.
Binance now faces heightened scrutiny in Nigeria following concerns expressed by the Central Bank of Nigeria (CBN) regarding “suspicious flows” of funds through Binance Nigeria in 2023. CBN head Olayemi Cardoso emphasized that $26 billion had flowed through Nigeria via Binance in 2023 from unidentified sources and users.
Additionally, reports are indicating that two senior Binance officials have been detained by the National Security Adviser’s office in Abuja as part of the country’s efforts to clamp down on cryptocurrency exchanges and mitigate speculation surrounding the Naira.
Local cryptocurrency analysts have voiced disappointment over the government’s unfriendly stance towards cryptocurrencies in addressing the nation’s foreign exchange challenges. A Nigerian crypto enthusiast commented on the X platform, stating that the country’s financial woes would persist if it continues to antagonize cryptocurrencies instead of focusing on manufacturing and exporting.
