Recently, Bayo Onanuga, a special adviser to Nigerian President Bola Tinubu, made serious accusations against Binance. He claimed that the cryptocurrency exchange was manipulating the exchange rate for Nigeria and essentially taking over the role of the Central Bank of Nigeria (CBN). Onanuga called for action from the EFCC and the CBN to crack down on platforms like Binance, which he believes are contributing to the devaluation of the national currency.
In response to the allegations, Binance acknowledged a problem with its peer-to-peer (P2P) platform for Nigerian users. The platform had automatically paused trading after users reported difficulties selling USDT above a certain price. Binance described this as a “temporary suppression of prices” and quickly adjusted its system to address the issue. Despite this, frustrated users turned to alternative platforms like KuCoin and ByBit to trade stablecoins.
Nigerians have increasingly turned to Binance to purchase digital assets as a hedge against rising inflation and currency devaluation. The Binance P2P platform has become a key venue for price discovery for foreign exchange traders in Nigeria. This has become particularly important in light of the economic challenges faced by the country, including instability in the forex market.
The Central Bank of Nigeria (CBN) has taken measures to stabilize the economy and currency in the face of forex speculation. Stakeholders have expressed concerns about the impact of crypto exchanges on exchange rates and the financial economy of Nigeria. However, others have argued that the popularity of Bitcoin and crypto trading in Nigeria is a result of previous CBN policies that restricted access to foreign exchange.
Binance has clarified that it is not a price discovery platform and that market forces determine prices on its platform. The exchange claims that it is not meant to replace official currency pricing in Nigeria. Despite this, Nigeria has emerged as one of the largest P2P markets in the world, especially after the CBN banned financial institutions from facilitating crypto trades in 2021.
The impact of Binance on the Nigerian economy is a complex issue that involves accusations of manipulation, responses from the cryptocurrency exchange, regulatory challenges from the CBN, and the evolving role of digital assets in the country. Moving forward, it will be important for all stakeholders to work together to ensure a stable and transparent financial environment for Nigeria.