Binance Withdraws Nigerian Naira from P2P Amid Government Crypto Regulations
Summary:
Binance, a cryptocurrency trading platform, has removed the Nigerian naira from its P2P function amidst allegations that the platform is contributing to the devaluation of the naira. This move has raised concerns among Nigerian users who expressed their dissatisfaction on the X social platform. Amid a sharp drop in naira's value and skyrocketing inflation, the government is targeting cryptocurrency platforms, which have become popular for trading and informal naira valuation. Binance, attracting increased scrutiny from the Central Bank of Nigeria, capped the selling price of Tether tokens on its P2P platform. This has resulted in users' inability to sell Tether at a value exceeding 1,802 naira per USDT, although the exchange clarified that this is due to an automatic system pause.
Binance, a platform for cryptocurrency trading, has withdrawn the Nigerian currency - the naira – from its peer-to-peer (P2P) functionality. Nigerian Binance customers voiced their concerns and complaints on the X social network following this step. The elimination of the naira from Binance's P2P market has been linked with Nigerian authorities' assertions that the platform is instrumental in depreciating the naira's value. Binance, according to presidential advisor Bayo Onanuga, could ruin Nigeria's economy by arbitrarily determining foreign exchange rates if not curtailed.
The P2P feature facilitates trade between users, buyers, and sellers without the need for a third party. This feature gained popularity in Nigeria in 2021 after the prohibition of the booming crypto industry in the nation during ex-President Buhari's term.
Following the steep depreciation of the naira and the ensuing 29.9% inflation rate – a nearly 30-year high – the government shifted its attention to cryptocurrency service providers. These platforms are well-known for trading and establishing a non-formal value for the naira.
Nigerian cryptocurrency users had previously reported difficulty accessing various crypto exchange sites, including Binance, OctaFX, and others. Shortly after, Binance capped the 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. However, contrary to local crypto community speculation, the exchange clarified that the price peg was a result of an automatic system pause.
Binance is attracting more scrutiny in Nigeria, with the Central Bank of Nigeria (CBN) raising alarms over "suspicious flows" of funds through Binance Nigeria in 2023. CBN governor Olayemi Cardoso pointed out that $26 billion was transferred via Binance in Nigeria in 2023 from anonymous sources and users.
Furthermore, the National Security Adviser (NSA)'s office has reportedly detained two high-ranking Binance officials in Abuja as Nigeria pushes to regulate cryptocurrency exchanges and control the naira's speculation.
Local crypto analysts are disappointed with the government's negative stance on cryptocurrencies as a solution to Nigeria's foreign exchange crisis. One Nigerian crypto enthusiast expressed on X that Nigeria's financial issues would persist if it antagonized cryptocurrencies and failed to concentrate on manufacturing and exporting.
Cointelegraph reached out to Binance for a response.
Published At
3/1/2024 11:22:10 AM
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