On Feb. 21, Bayo Onanuga, a special adviser to Nigerian President Bola Tinubu, accused Binance of “blatantly setting exchange rate for Nigeria, hijacking CBN role,” in a scathing attack on social media platform X. He continued,
“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.”
The post comes after Binance’s peer-to-peer (P2P) platform for Nigerian users “automatically paused” yesterday after users reported difficulties selling USDT above a specific price.
Acknowledging the problem, Binance described it as a “temporary suppression of prices,” adding that it promptly adjusted its system to address the issue and resume trading activities.
During the past day, the Nigerian social media space was littered with several Binance users complaining about their inability to trade USDT on the platform as the country’s fiat currency fell to record lows against the US dollar.
Frustrated users soon turned to alternative platforms, with Ray Youssef, former CEO of Paxful, recommending his new platform, noOnes. Several traders also confirmed to CryptoSlate that they were shifting to other P2P platforms like KuCoin and ByBit to trade stablecoins.
Binance’s pivotal role in Nigerian forex trades
Nigerians have increasingly turned to Binance to purchase digital assets to safeguard against rising inflation and currency devaluation in recent years. Notably, the Binance P2P platform has become a crucial price discovery venue for Nigerian foreign exchange traders.
In response to the rising economic challenges, particularly concerning forex speculation, the Central Bank of Nigeria (CBN) has implemented various measures to stabilize the economy and currency, with little to no success recorded.
The CBN has highlighted how these speculative traders have exacerbated the country’s inflation and destabilized Nigeria’s financial economy.
Former presidential aide Bashir Ahmad claimed crypto exchanges helped worsen the situation. According to him, the reliance on such crypto platforms not authorized to regulate forex leads to fluctuations in exchange rates, affecting entities like the Bureau De Change.
However, stakeholders like Femi Longe stated that Bitcoin and crypto trading became more prominent in Nigeria due to CBN’s previous policy restricting foreign exchange access.
Meanwhile, Binance clarified that it is not a price discovery platform. The exchange stated that market forces determine prices on its platform and are not intended as a substitute for official currency pricing in Nigeria.
Nigeria emerged as one of the biggest P2P markets in the world after the CBN banned financial institutions from facilitating crypto trades in 2021. The regulator lifted this ban last year, attaching stringent regulations to the industry.
Data from Binance confirms significant Nigerian trading activity, with the USDT/NGN trading pair alone recording trades worth 2.7 billion Naira, equivalent to $1.5 million USDT, in the past day.
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