Some cryptocurrency exchanges in Nigeria encountered accessibility challenges, leading to speculation about potential restrictions on crypto sites, as reported by the Financial Times.
Local media previously suggested that Nigeria’s apex bank instructed the Nigerian Communications Commission, the telecom regulator, to suspend access to crypto websites, including Binance, Coinbase, and Kraken. This development came shortly after Binance imposed limits on peer-to-peer transactions trading the USDT/NGN pair, coinciding with the naira’s significant depreciation to record lows.
Crypto exchange platforms, notably Binance, gained popularity for their peer-to-peer features, facilitating direct trades after the central bank prohibited local financial institutions from engaging in such transactions three years ago. Despite recent considerations by the central bank to lift restrictions on banks and potentially grant licenses to crypto companies for legal transactions, the sharp decline of the naira prompted Binance to impose trade restrictions.
For many Nigerian crypto users, platforms like Binance serve as a hedge against the frequent devaluation of the naira. However, the government perceives its decision to restrict access to these platforms as an effort to regain control over the naira’s valuation.
These exchanges have played a pivotal role in determining unofficial exchange rates for the naira, with platforms like Binance serving as benchmarks for local foreign exchange rates. By limiting access to these platforms, the government aims to assert authority over the naira’s valuation and stabilize its position in the financial market. The long-term consequences of the government’s recent actions are yet to unfold.
A presidential spokesman confirmed Nigeria’s issuance of a directive instructing telecoms and internet service providers to block access to cryptocurrency trading platforms. While Binance acknowledged that some users experienced issues accessing the site, it assured users of account accessibility and fund security. As of now, these platforms, including Binance, Kraken, and Coinbase, are currently accessible, suggesting a temporary halt to the directive restricting access.
