Calls for increased regulation on Binance are growing as the Nigerian Association of Exchange Bureau Operators (ABCON) has urged the Nigerian federal government to prohibit Binance from conducting operations within the country.
ABCON, which serves as a self-regulatory body encompassing all licensed bureaux de change (BDCs) recognized by the central bank, has made this move in response to their belief that Binance significantly contributed to the pressure on Nigeria's national currency, the na ira. President of ABCON, Alhaji Aminu Gwadabe, offered this recommendation during an interview in Lagos on August 8.
Gwadabe's assertion was that Binance's exchanges have increasingly taken on the role of a central hub for investor and exporter activities, both in the windows of the parallel markets. He pointed out the impressive liquidity of the platform, highlighting a staggering 1.2 million transactions taking place every second. His perspective was that this intense competition could be best addressed by implementing a ban on Binance, and he proposed that enhancing liquidity is the strategy to achieve this goal.
The report also indicated that the chairman of ABCON highlighted a shift in the Nigerian foreign exchange market sentiment, moving from a positive outlook to a more pessimistic one. This change in market sentiment, he emphasized, has the potential to undermine citizen confidence , a critical factor influencing global currencies.
The Nigerian Securities and Exchange Commission (SEC) took action on July 28 by warning domestic investors against engaging with cryptocurrency exchange Binance. This announcement referenced a previous notice that addressed the activities of fraudulent entities exploiting the Binance brand. In response, Binance issued a cease and desist notice to Binance Nigeria. The regulator emphasized that Binance lacked the necessary authorization for its operations within the country, thereby labeling its activities as illegal.
Nigeria has displayed a cautious approach to the cryptocurrency sector, while also advocating for the development of its central bank digital currency (CBDC). In July, the country enhanced its CBDC system by incorporating near-field communication technology, facilitating ting contactless payments.
