Nigerian Crypto Exchanges Blocked Amid Severe Fall In Local Currency

Key Points:

• The country blocks access to Nigerian crypto exchanges amid naira’s record lows.
• Telecommunications providers enforce restrictions on platforms like Binance, Coinbase, and Kraken.
• The government seeks to control the naira valuation, reflecting the global regulatory trend post-2022 crypto crash.

Nigeria has implemented stringent measures in an attempt to stabilize its plummeting national currency, the naira, by restricting access to major cryptocurrency exchanges, according to a report by the Premium Times.

Nigerian Crypto Exchanges Strongly Cracked Down

Telecommunications companies and internet service providers in Nigeria have been instructed to block access to cryptocurrency trading platforms, as confirmed by a presidential spokesman. Websites such as Binance, Coinbase, and Kraken are among those affected by the directive, which aims to address the widespread use of crypto as a hedge against the frequent devaluation of the naira.

Reports indicate that telecommunications providers have begun implementing the order, following Binance’s imposition of limits on peer-to-peer transactions trading the USDT/NGN pair. Cryptocurrency exchanges 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.

Government Moves to Control Naira’s Value Amid Global Regulatory Shifts

Bayo Onanuga, Special Adviser Information and Strategy to the President of Nigeria affirmed the government’s decision to block access to these Nigerian crypto exchanges, emphasizing the need to halt the weakening of the local currency. The naira has depreciated by 70% since the central bank lifted its dollar peg in June, failing to attract anticipated foreign-currency inflows.

While Nigerian crypto exchanges serve as a hedge for many people against currency devaluation, the government views restricting access to these platforms as crucial to regaining control over the naira’s valuation. However, the long-term implications of these actions remain uncertain.

These developments in Nigeria coincide with global regulatory efforts to rein in the cryptocurrency sector following the 2022 market crash, which resulted in bankruptcies, scandals, and significant investor losses. Jurisdictions like the European Union are actively pursuing new legislation to govern the asset class, reflecting a broader trend towards increased regulation in the industry.