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Central Bank of Nigeria (CBN) to Support, Regulate Cryptocurrency

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The Central Bank of Nigeria (CBN) has said cryptocurrency will come to life in Nigeria despite banning the nation’s financial institutions from facilitating payments for crypto transactions earlier in the year.

Speaking at the 79th Monetary Policy Committee (MPC) meeting held on Tuesday in Abuja, Godwin Emefiele, Governor of CBN, said “We are committed in the CBN and I can assure everybody that digital currency will come to life even in Nigeria.”

Emefiele explained that an investigation conducted by the apex bank revealed that there were legitimate and illegitimate crypto traders and investors in Nigeria.

However, he said Nigeria is ranked 2nd in the crypto space but ranked 27th in the global economy. Suggesting that the apex bank may be looking to explore opportunities in the crypto space to complement the fragile Nigerian economy.

Emefiele said, “We have carried out our investigation and we found out that a substantial percentage of our people are getting involved in cryptocurrency which is not the best. Don’t get me wrong, some may be legitimate but most are illegitimate.”

“Under cryptocurrency and Bitcoin, Nigeria comes 2nd while in the global side of the economy, Nigeria comes 27th. We are still conducting our investigation and we will make our data available.”

Commenting on the risk associated with the crypto space, the CBN boss said Elon Musk boosted the value of cryptocurrencies after announcing a $1.5 billion investment in Bitcoin and its acceptance as a means of payment for Tesla vehicles immediately the apex bank restricted financial institutions in Nigeria from facilitating crypto payments.

Elon Musk, who later tweeted otherwise, crashed the entire crypto market after raising concerns on the energy usage of bitcoin and its implication on the ecosystem.

“We saw the market collapse. Initially, when Elon Musk tweeted around the time when we said our banking and payment facilities are no longer available for cryptocurrency transactions and he tweeted that he will invest $1.5 billion and the price (Bitcoin) went up. He now tweeted and raised a few concerns and the thing (Cryptocurrency) plunged.”

Emefiele was insinuating that the apex bank was making an informed decision and not just a knee-jerk reaction to an unregulated crypto space with several frauds.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Nigeria Imposes Record $10 Billion Fine on Binance Over Forex Impact

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The Nigerian government has levied a historic $10 billion fine against the cryptocurrency trading platform, Binance, citing its alleged role in the nation’s forex crisis.

The fine, which stands as the largest ever imposed by Nigeria on a single entity, comes amidst mounting concerns over the stability of the country’s currency and economy.

According to Bayo Onanuga, the special adviser on information and strategy to President Bola Tinubu, Binance stands accused of engaging in illegal transactions that have significantly impacted Nigeria’s foreign exchange market.

Onanuga asserted that Binance, despite lacking a physical presence or registration in Nigeria, facilitated illicit activities that led to substantial profits for the platform while causing immense losses for the nation.

The crux of the government’s allegations revolves around Binance’s alleged manipulation of exchange rates between the US dollar and the Nigerian naira.

Onanuga claimed that users on the platform were able to arbitrarily set exchange rates, a practice that contravenes Nigerian law and undermines the authority of the Central Bank of Nigeria (CBN) in regulating currency exchange.

The repercussions of Binance’s actions, as outlined by Onanuga, have been dire. The unregulated fixing of exchange rates purportedly contributed to a staggering 70% devaluation of the naira in recent months, exacerbating Nigeria’s already precarious economic situation.

In response to mounting pressure, Binance has ceased naira-related transactions on its platform and pledged cooperation with Nigerian authorities.

However, the government remains steadfast in its determination to hold the platform accountable for its alleged transgressions.

The imposition of the $10 billion fine underscores the severity of the situation and sends a clear message that Nigeria will not tolerate actions that jeopardize its economic stability.

The government’s move reflects its commitment to safeguarding the integrity of the nation’s financial systems and protecting the interests of its citizens.

As the controversy unfolds, questions linger regarding the broader implications for cryptocurrency regulation in Nigeria and the global fintech landscape.

With Binance facing unprecedented scrutiny and the forex crisis deepening, stakeholders await further developments that could reshape the trajectory of Nigeria’s economic future.

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Binance Disables Naira Feature to Halt Possible Capital Outflow

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Binance, the world’s leading cryptocurrency exchange platform, on Wednesday disabled the Naira pair on its Peer-to-Peer (P2P) platform shortly after Financial Times (FT) reported the arrest of two of the company’s executives.

The two executives reportedly flew into the country following the Federal Government’s decision to ban cryptocurrency exchanges to rein in speculation and curb currency manipulations.

However, the two were arrested by the authorities at the airport and their passports were confiscated pending investigation into Binance activities in Nigeria.

Binance which had sustained operations on its mobile application despite the ban imposed by the government on the organisation a week earlier and even released a statement to that effect suddenly disabled its Naira pair on Wednesday after FT broke the news of the arrest.

It should be recalled that Binance introduced the P2P service to beat the impact of sanctions on its operations after the Central Bank of Nigeria (CBN) restricted all financial institutions from facilitating cryptocurrency transactions in 2021.

This means that Binance disabled its Naira pair to curb capital outflow in the aftermath of the report and it is not in compliance with the Federal Government’s position as people are insinuating.

During the Monetary Policy Committee (MPC) press conference, Olayemi Cardoso, the Governor, CBN had heaped most of the woes of Nigeria’s currency on operations of Binance and other similar platforms.

According to him, a total of $26 billion was moved through Binance Nigeria in the last one year from both unknown sources and users.

He “We are concerned that certain practices go on that indicate illicit flows going through a number of these entities [crypto platforms] and suspicious flows at best. In the case of Binance, in the last one year alone, $26bn has passed through Binance Nigeria from sources and users who we cannot adequately identify”.

Therefore, the news of the arrest would have triggered an exodus outflow of capital to other cryptocurrency exchange platforms like Kucoin and dragged on Binance’s activity level at a time when activity was just picking up ahead of Bitcoin Halving and the subsequent bullish run.

Nigeria is by far the largest cryptocurrency market in Sub-Saharan Africa and between July 2022 and June 2023 received $60 billion in crypto value, according to Chainalysis.

“Nigeria is one of only six countries in the top 50 by size globally whose crypto transaction volume grew year-over-year in the time period we studied. Its growth rate of 9.0% places it third among those six.”

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Nigeria Detains Binance Executives in Crackdown on Cryptocurrency Speculation

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Nigeria has detained two senior executives of Binance, one of the world’s largest cryptocurrency exchanges, over currency exchange manipulation on the company’s platform.

The crackdown comes amidst escalating concerns over the rampant devaluation of the naira, which has propelled inflation to a nearly three-decade high of 29.9%.

The detained executives flew to Nigeria in response to the government’s recent ban on several cryptocurrency trading platforms, only to find themselves detained by the office of the national security adviser, who also confiscated their passports.

While Binance has remained tight-lipped about the incident, Nigerian authorities have intensified their scrutiny of cryptocurrency exchanges as they seek to stem illicit financial flows and establish control over the nation’s monetary policy.

Nigeria’s central bank governor, Olayemi Cardoso has raised concerns over the flow of funds through crypto exchanges, citing $26 billion passing through Binance Nigeria in the past year alone from unidentifiable sources and users.

The government’s aggressive stance has prompted demands for detailed user lists from Binance since its inception, indicating a broader investigation into cryptocurrency activities within the country.

This crackdown marks a significant setback for Binance, which has been attempting to overhaul its internal operations following a $4.3 billion penalty imposed by US authorities for money laundering and sanctions violations.

The detention of its executives underscores the challenges cryptocurrency exchanges face in navigating regulatory landscapes worldwide, particularly in emerging markets like Nigeria where authorities are grappling with economic instability and currency devaluation.

As Nigeria intensifies its efforts to attract foreign investment and revitalize its struggling economy, the clash between regulatory oversight and the decentralized nature of cryptocurrencies underscores the complexities and tensions inherent in the global financial system.

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