The Nigerian government has taken measures to block access to major cryptocurrency exchanges, including Binance, Coinbase, and Kraken. This move is part of the government’s efforts to curb currency speculation as the value of the Nigerian naira continues to fall. The telecoms regulator, the Nigerian Communications Commission (NCC), issued an order to restrict consumer access to these websites, causing intermittent access for users.
This action represents a reversal in Nigeria’s stance on cryptocurrencies. Previously, the government had embraced digital assets as part of its market-friendly reforms to attract foreign investment. They had also lifted a ban on crypto transactions to address money laundering and terrorism financing concerns.
However, the government is now grappling with the need to stabilize its currency and address multiple exchange rates. The Nigerian naira has experienced significant devaluations in recent months. Cryptocurrency exchanges, such as Binance, have become important sources for unofficial market prices for the naira. Local traders also rely on these platforms for trading between the naira and tether, the largest stablecoin pegged to the US dollar.
Bayo Onanuga, a special adviser to President Tinubu, accused Binance of setting exchange rates for Nigeria and undermining the role of the Central Bank of Nigeria. He called for a ban on cryptocurrencies to prevent further devaluation of the country’s currency. Binance responded by stating that some users in Nigeria are experiencing difficulties accessing their platform but assured that users’ funds are secure.
Nigeria ranked second globally, after India, in terms of the proportion of private wealth held in cryptocurrency. However, analysts note that interest in digital assets is primarily among young investors who have lost trust in the stability of the naira. The government has previously adopted unconventional approaches to protect the value of its currency, such as shutting down price-setting websites and cutting down trees to discourage parallel market traders.
It is worth mentioning that the Nigeria Securities and Exchange Commission declared a local Binance entity illegal last year for lacking registration and regulation. However, users in Nigeria could still access the international Binance.com site. Additionally, Binance faced legal consequences in the United States, with a hefty penalty and its founder stepping down as CEO after pleading guilty to charges related to money laundering and sanctions violations.