April 23, 2024

Nigeria Restricts Access to Major Centralized Cryptocurrency Exchanges Amid Currency Instability

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In an effort to stabilize its rapidly depreciating national currency, the naira, Nigeria has taken drastic measures by blocking access to major cryptocurrency exchanges. The move comes as the Nigerian government aims to curb currency speculation amid record lows for the naira, further intensifying its efforts to regain control over the currency’s valuation.

Late on Wednesday, the Nigerian Communications Commission (NCC) issued orders to telecoms companies instructing them to restrict consumer access to the websites of major cryptocurrency platforms, including Binance, Coinbase, and Kraken. As a result, consumers experienced only intermittent access to these sites on Thursday.

Bayo Onanuga, Special Adviser Information and Strategy to the President of Nigeria, confirmed reports of the government blocking access to cryptocurrency exchanges, emphasizing the need to prevent these platforms from influencing the naira’s value. Onanuga stated, “Binance, facing regulatory showdown in many countries, and causing disruptions in the currency market, should not be allowed to dictate the value of the naira, not on its crypto exchange platform. Crypto should be banned in our country or else this bleeding of our currency will continue unabated.”

Cryptocurrency exchanges, especially platforms like Binance, have played a significant role in establishing unofficial market prices for the naira, often serving as benchmarks for local foreign currency exchange rates. The government’s decision to restrict access to these platforms reflects its determination to regain control over the currency valuation, amid concerns that cryptocurrency entities are contributing to the naira’s devaluation.

Nigeria’s adoption of such stringent measures highlights the challenges the country faces in managing its economic stability. The naira has lost over 70% of its value since the central bank lifted its dollar peg in June. This move could potentially have broader implications, affecting other African nations such as Kenya, South Africa, and Ghana. The disruption caused by restricting access to centralized crypto exchanges like Binance, Kraken, and Coinbase may pave the way for increased interest in decentralized exchanges throughout Africa.

In late November 2023, Philippine financial regulators issued a notice to Binance, stating that the company was operating in the country without a license. Officials warned that Binance lacked authorization to sell or offer securities in the nation, cautioning citizens against using the platform. The regulators indicated that if Binance did not address this issue by the end of February 2024, they would take measures to block its operations. This regulatory scrutiny adds to the challenges faced by major cryptocurrency exchanges operating in various jurisdictions worldwide.

Digital Assets Desk

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