Binance, a prominent cryptocurrency exchange globally, is currently facing opposition from the Association of Bureau De Change Operators of Nigeria (ABCON). Moreover, this self-regulatory body represents all licensed Bureaux de Change (BDC) operating within the country. ABCON alleges that Binance’s facilitation of high-volume trading in foreign exchange and cryptocurrencies puts excessive strain on the Nigerian naira, the local currency.
Alhaji Aminu Gwadabe, ABCON President, expressed concerns in an August 8 interview with Nairametrics, a local news outlet, in Lagos. He highlighted that Binance has emerged as a prominent platform for trading foreign exchanges and cryptocurrencies at varying rates within the Investor and Exporters window and the parallel market.
Gwadabe emphasized that Binance’s exceptional liquidity stands as a competitive challenge to the domestic market. He proposed banning Binance and improving the liquidity of Nigeria’s currency, the naira, to tackle the problem.
Gwadabe observed that the Nigerian foreign exchange market has transitioned from a positive to a negative outlook, primarily due to the prevailing pessimism among market participants. He expressed concern about the potential impact on citizens’ confidence, emphasizing its crucial significance for any currency worldwide.
The Nigerian Securities and Exchange Commission (SEC) warned domestic investors about their dealings with Binance on July 28. The SEC cited a previous circular that addressed the unlawful activities of a fraudulent entity falsely claiming association with Binance. In response, Binance Nigeria received a cease and desist notice from Binance.
Binance’s Response & Nigeria’s Stance On Crypto
The Securities and Exchange Commission (SEC) has explicitly stated that Binance lacks the authorization to operate within Nigeria. Moreover, the regulatory body emphasizes that Binance’s activities contravene existing laws in the country.
Cointelegraph contacted Binance to gather their comments regarding ABCON’s call for a ban. However, no response was received from them by the time of publication.
Furthermore, Nigeria has taken a cautious approach toward the cryptocurrency sector while promoting its Central Bank Digital currency (CBDC). It enhanced its CBDC system in July by incorporating near-field communication technology, enabling convenient contactless payments.
Nigeria has emerged as one of the most active countries in Africa when it comes to embracing cryptocurrency. According to Statista, in 2020, Nigeria ran second globally for crypto usage, with approximately 32% of respondents reporting their use or ownership of digital currencies. Despite this growth, Nigeria has encountered regulatory hurdles.
Despite the challenges, many experts hold the belief that Nigeria possesses significant potential for innovation and development in the field of cryptocurrency. In addition, one expert is Yele Bademosi, CEO of Bundle Africa, a social payments app for crypto and cash. In an interview with Cointelegraph, Bademosi shared his view on Nigeria’s potential to excel in cryptocurrencies.
Additionally, he highlighted the nation’s advantage of a youthful and tech-savvy population, a flourishing remittance market, and a growing attraction to decentralized finance (DeFi). He believes these factors could position Nigeria as a significant player in the cryptocurrency realm.
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“The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.”
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