Bitrabo Editorial
Nigeria is witnessing a decline in the value of the naira while facing strict regulations on cryptocurrency trading. The government has blamed digital assets for the currency’s instability and has launched a crackdown on the crypto market, leading major exchanges to withdraw their services and pushing traders towards riskier alternatives.
Central Bank Accuses Cryptocurrency of Devaluing the Naira
The Central Bank of Nigeria (CBN) has pointed fingers at cryptocurrencies, alleging that the digital assets are being used to manipulate the naira’s value through schemes on peer-to-peer (P2P) platforms. These actions are said to undermine the bank’s efforts to stabilize the currency through monetary policies.
Exchanges Respond to Regulatory Pressure
The accusations from the central bank have had a significant impact on digital currency exchanges. Concerned about regulatory backlash or a potential ban, major platforms like Binance, OKX, and recently KuCoin have all halted naira support on their P2P platforms.
KuCoin cited compliance reasons for the temporary suspension, leaving Nigerian bitcoin traders uncertain about when the services will resume.
Traders Forced into Underground Crypto Markets
The looming ban on crypto P2P trading by the Nigerian Securities and Exchange Commission (SEC) is expected to drive crypto transactions into encrypted messaging apps, creating a risky environment for traders with scams and lack of consumer protection.
Government Measures Impact Crypto Market
The Central Bank’s directive to financial institutions to freeze cryptocurrency transactions and the EFCC’s freezing of over 1,000 crypto trader accounts have further restricted Nigerians’ ability to engage in legal crypto trading using naira.
Concerns Over Regulatory Clarity and Impact
Despite stringent measures, the naira’s value continues to decline, raising questions about the effectiveness of the government’s crackdown on cryptocurrencies. The lack of transparency in regulatory processes has also hindered legitimate crypto businesses, driving the industry towards underground operations.
Featured image from Getty Images, chart from TradingView