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Bayo Onanuga, a special adviser to Nigerian President Bola Tinubu, On February 21, made damning allegations against Binance, asserting that the platform has overtly taken on the role of determining exchange rates for Nigeria, effectively usurping the responsibilities of the Central Bank of Nigeria (CBN). This scathing attack was delivered via the social media platform X.

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“The EFCC and the CBN should move against these platforms trying to manipulate our national currency to Ground Zero. Crypto should be banned in our country or else this bleeding of our currency will continue unabated.”

Onanuga

Binance’s peer-to-peer (P2P) platform for Nigerian users experienced an automatic pause on february 20 following reports of difficulties selling USDT above a specific price.

Acknowledging the issue, Binance described it as a “temporary suppression of prices” and promptly adjusted its system to rectify the problem, allowing trading activities to resume.

Read Also: FG Secures $3b Loan to Stabilize the FX Rate as Naira Drops to N872 Following the Previous Week’s Hike to N930

Over the past day, Nigerian social media platforms were flooded with complaints from Binance users unable to trade USDT as the country’s fiat currency plummeted to record lows against the US dollar.

Frustrated by the situation, users sought alternative platforms and transitioned to other P2P platforms like KuCoin and ByBit for stablecoin trading.

What is Binance’s Impact On the Nigerian Forex Market

Due to CBN’s previous policies restricting access to foreign exchange, Nigerians have increasingly relied on digital assets to conduct international transactions and as a hedge against currency devaluation. 

The Binance P2P platform has particularly emerged as a vital venue for Nigerian forex traders to discover prices. To counter the growing economic challenges, especially regarding forex speculation, the Central Bank of Nigeria (CBN) has implemented several measures aimed at stabilizing the economy and currency, albeit with limited success.

The CBN has underscored how speculative trading exacerbates inflation and disrupts Nigeria’s financial stability. Former presidential aide Bashir Ahmad suggested that crypto exchanges have contributed to worsening the situation. He believes that the dependence on unauthorized crypto platforms for forex trading leads to exchange rate fluctuations, impacting entities like the Bureau De Change.

Meanwhile, Binance clarified that it does not serve as a price discovery platform. The exchange emphasized that market dynamics determine prices on its platform and are not intended as substitutes for official currency pricing in Nigeria.

Nigeria emerged as one of the largest P2P markets globally after the CBN prohibited financial institutions from facilitating crypto trades in 2021. Last year, the regulator lifted this ban but imposed stringent regulations on the industry.

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