Sokipiriye Dokubo
In light of the Nigerian naira’s rapid depreciation and a record-high inflation rate of 29.9%, the government is turning its attention towards cryptocurrency platforms. This move has sparked fears among Nigerian crypto enthusiasts that discontinuing naira trading on these exchanges could worsen the currency’s volatility.
Voices of Concern from Industry Experts
Rume Ophi, the executive secretary of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), believes that blaming global cryptocurrency platforms for the naira’s devaluation is not a practical stance. Ophi suggests that Nigeria should focus on effectively regulating the crypto industry through the framework provided by the Nigerian Securities and Exchange Commission (SEC) in 2022.
Government’s Attention on Crypto Platforms
The Nigerian government is targeting cryptocurrency platforms amidst the naira’s significant decline and escalating inflation. Authorities assert that these platforms play a role in the devaluation of the currency by setting informal benchmarks.
Academic Insights
Iwa Salami, an associate professor at the University of East London, argues that cryptocurrencies are unfairly blamed for weakening national currencies. Salami recommends a more balanced regulatory strategy rather than an outright ban in Nigeria. She stresses the importance of protecting consumers and investors while fostering innovation in the cryptocurrency sector.
Preference for Regulation over Prohibition
Recent actions by Nigerian authorities against cryptocurrency exchanges, like scrutinizing Binance, have raised concerns. Salami suggests that Nigeria should focus on regulation, not prohibition, leveraging the SEC’s 2022 framework. This approach could enhance oversight while encouraging innovation in the industry.
Advocating Global Regulatory Standards
Salami also proposes adopting international standards for crypto assets, such as recommendations from the Financial Stability Board. Embracing these standards globally could offer a unified approach to regulatory concerns, ensuring consistency and transparency in the crypto industry.
In conclusion, the proposal to cease naira trading on crypto exchanges in Nigeria has triggered apprehension among crypto enthusiasts and experts. They emphasize the need for a balanced regulatory approach to uphold financial stability and nurture innovation within the cryptocurrency domain.