On February 21, Bayo Onanuga, Special Advisor to Nigerian President Bola Tinubu, said: accused Binance of “blatantly fixing the exchange rate for Nigeria and hijacking the role of CBN,” in a scathing attack on social media platform X. He continued:
“The EFCC and the CBN must resist these platforms that are trying to manipulate our national currency to Ground Zero. Crypto must be banned in our country, otherwise this bleeding of our currency will continue unabated.”
The message comes after Binance’s peer-to-peer (P2P) platform for Nigerian users was “automatically paused” yesterday after users reported difficulty selling USDT above a specific price.
Binance acknowledged the issue and described it as a “temporary price suppression,” adding that it immediately adjusted its system to address the issue and resume trading activities.
Over 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 a record low against the US dollar.
Frustrated users quickly turned to alternative platforms, with Ray Youssef, former CEO of Paxful, recommending his new platform, noOnes. Several traders also confirmed this CryptoSlate that they switched to other P2P platforms such as KuCoin and ByBit to trade stablecoins.
Binance’s central role in Nigerian forex transactions
Nigerians have increasingly turned to Binance in recent years to buy digital assets to protect against rising inflation and currency devaluation. The Binance P2P platform in particular has become a crucial price discovery venue for Nigerian currency traders.
In response to increasing economic challenges, especially in the area of currency speculation, the Central Bank of Nigeria (CBN) has implemented several measures to stabilize the economy and currency, with little to no success.
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 that crypto exchanges have worsened the situation. According to him, the dependence on such crypto platforms that are not authorized to regulate forex leads to fluctuations in exchange rates, impacting entities such as the Bureau De Change.
But stakeholders like Femi Longe declared that Bitcoin and crypto trading became more prominent in Nigeria due to CBN’s previous policy that restricted access to foreign exchange.
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 prices in Nigeria.
Nigeria emerged as one of the largest P2P markets in the world after the CBN banned financial institutions from facilitating crypto transactions in 2021. The regulator lifted this ban last year and imposed strict rules on the sector.
Data from Binance confirms significant Nigerian trading activity, with the USDT/NGN trading pair alone recording trades worth 2.7 billion Naira in the past day, equivalent to $1.5 million USDT.