- Binance, a leading cryptocurrency exchange, faces potential ban in Nigeria due to concerns over its influence on the naira.
- ABCON’s president, Alhaji Aminu Gwadabe, highlights Binance’s vast liquidity, with 1.2 million transactions every second, posing challenges to Nigeria’s financial stability.
Binance’s Operations Under the Nigerian Lens
Leading cryptocurrency platform, Binance, is under intensified scrutiny in Nigeria. The Association of Bureau De Change Operators of Nigeria (ABCON), a primary self-regulatory body encompassing central bank-licensed Bureaux de Change (BDC), has appealed to the Nigerian government to impose a ban on Binance’s activities within the country.
The plea from ABCON arises from its observations, pinpointing Binance as a primary factor exerting pressure on Nigeria’s currency, the naira. Alhaji Aminu Gwadabe, ABCON’s president, elaborated on these concerns during an interview in Lagos on Aug. 8.
Binance’s Influence on Nigerian Markets
Gwadabe accentuated Binance’s growing dominance as a hub for the Investor and Exporters window and the parallel market. With the platform clocking an astonishing 1.2 million transactions every second, it poses a significant challenge to Nigeria’s economic equilibrium. Gwadabe proposes that the most effective countermeasure is to fortify liquidity and thereby restrict Binance’s overarching influence.
Additionally, Gwadabe voiced concerns over the Nigerian foreign exchange market’s shifting dynamics. The once-optimistic environment has begun showing signs of skepticism. Such a sentiment, Gwadabe believes, threatens to erode public trust, an essential ingredient underpinning any currency’s international standing.
In a preceding move on July 28, the Nigerian Securities and Exchange Commission (SEC) had sounded an alert for domestic investors about Binance. This warning cited a preceding notice addressing the deceptive activities of an entity misusing Binance’s identity. As a countermeasure, Binance presented a cease and desist order against its Nigerian counterpart. The SEC reiterated that Binance’s ongoing operations in Nigeria lack the requisite legal authorization, labeling them as contraventions of established laws.
It’s noteworthy that Nigeria, while exhibiting cautiousness towards the cryptocurrency realm, is also actively promoting its central bank digital currency (CBDC). Recent advancements saw the integration of near-field communication technology into the CBDC mechanism, fostering more streamlined contactless payments.
While the ABCON’s stance has been made clear, Binance has yet to publicly respond to these calls for a ban as of this article’s publication.