Dollar: Nigerian govt to ban naira from crypto trading platforms

The Federal Government, in collaboration with the Securities and Exchange Commission (SEC), is taking decisive steps to address the issue of exchange rate manipulation and illicit dollar trading. As part of this effort, the government plans to remove the naira from all peer-to-peer (P2P) crypto platforms.

The decision to delist the naira from P2P platforms follows concerns about the manipulation of the exchange rate and fraudulent activities within Nigeria’s crypto market, estimated at $57 billion. Emomotimi Agama, the newly-appointed Director-General of the SEC, made this announcement during a meeting with members of the Nigerian blockchain industry organized by the Blockchain Industry Coordinating Committee of Nigeria, Punch reports.

Agama emphasized the need for cooperation from the crypto community in implementing this measure to curb manipulation effectively. He highlighted the government’s commitment to drafting new regulations to govern the crypto sector, addressing the misuse of P2P platforms for illicit purposes.

This development comes shortly after the Central Bank of Nigeria instructed payment service banks to warn customers against engaging in crypto transactions. Some local exchanges, such as OKX and Bitbarter, have already ceased naira services in solidarity with the government.

The SEC DG urged the crypto community to identify and expose those involved in manipulating the naira, stressing the importance of patriotism and ethical conduct in the industry. He emphasized the SEC’s commitment to fostering an enabling environment for fintech innovation while safeguarding national economic interests.

Meanwhile, stakeholders, including the Fintech Association of Nigeria and the Blockchain Industry Coordinating Committee, expressed support for the government’s actions and proposed collaboration to address challenges facing the crypto space.

In response to regulatory actions, major fintech firms have suspended new account openings and cautioned customers against trading in cryptocurrencies to ensure compliance with KYC regulations. The CBN’s move to suspend new account openings on affected platforms received backing from the Bank Customers Association of Nigeria, emphasizing the need for regulatory compliance to maintain the integrity of financial institutions.

The government’s efforts to regulate the crypto sector reflect broader concerns over the impact of digital assets on the economy. Recent actions against cryptocurrency exchanges like Binance underscore the government’s determination to prevent illicit financial activities and safeguard the nation’s economic stability.