The crypto exchange facing a new challenge

As it tries to stay afloat after costly legal setbacks, the crypto exchange Binance faces new regulatory challenges. This time, the issues emanate from Nigeria where authorities are decrying the platform’s potential influence on the country’s economy, causing concern among local traders.

The Call for Regulatory Measures Against the Crypto Exchange Binance

Binance’s regulatory problems in Nigeria are far from winding down. Indeed, the crypto company is under scrutiny for the threats it may pose to the stability of the country’s economy.

In a recent comment on the matter, Bayo Onanuga, the presidential spokesperson, highlighted the urgent need for regulatory measures to address the situation. More specifically, the control of Binance over exchange rates.

According to Onanuga, this is what Binance achieves by setting exchange rates in a manner that he deems arbitrary. This practice, from his point of view, directly confronts the authority of the Central Bank of Nigeria (CBN) and undermines the state’s economy.

The official also discouraged the use of the parallel market for exchange rates. He advocates a rigorous adherence to the CBN’s official rate in order to stabilize the economy and alleviate inflationary pressures.

The Context of Nigeria’s Economy

Fundamentally, these allegations against the crypto exchange Binance are part of a very specific economic context. That of a major economic crisis characterized by runaway inflation, challenges in the foreign exchange market, and the removal of fuel subsidies.

All of this contributes to the collapse of the naira, the local currency. A situation which forces Nigerian authorities to seek ways and means to achieve a certain control over the prevailing economic instability.

In these circumstances, regulatory bodies are stepping up their monitoring of crypto firms like Binance in order to curtail illicit financial activities. This comes at a time when Olayemi Cardoso, the governor of the CBN, speaks of dubious transactions.

The latter, estimated at around 26 billion dollars, are said to have been facilitated by Binance from unidentified sources. A concern that prompted the opening of an investigation, still ongoing, by anti-corruption agencies. As the debate on Binance and crypto regulation continues, Nigeria’s approach could influence global discussions on the governance of digital finance.

Luc Jose A.

Diplômé de Sciences Po Toulouse et titulaire d’une certification consultant blockchain délivrée par Alyra, j’ai rejoint l’aventure Cointribune en 2019.
Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l’économie, j’ai pris l’engagement de sensibiliser et d’informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu’elle offre. Je m’efforce chaque jour de fournir une analyse objective de l’actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.