Some Nigerian crypto enthusiasts are concerned that the decision to suspend naira trading on cryptocurrency exchanges could exacerbate the challenges facing the volatile fiat currency.
According to Rume Ophi, the executive secretary of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), the Nigerian government’s claim that global cryptocurrency platforms are responsible for the depreciation of the naira is unrealistic. Ophi believes that effective regulation of the cryptocurrency industry can be achieved through the framework introduced by the Nigerian Securities and Exchange Commission (SEC) in 2022.
With the naira rapidly losing value and inflation reaching a nearly three-decade high of 29.9%, the government has shifted its attention to platforms offering cryptocurrency services. These platforms have played a significant role in trading and establishing an informal value for the naira.
In a recent article, Iwa Salami, an associate professor at the University of East London, argued against blaming cryptocurrencies for devaluing national currencies. Instead, she proposed that Nigerian authorities should consider a balanced regulatory approach rather than a complete ban, as there is no direct evidence linking crypto to currency devaluation, despite its association with illicit activities like money laundering and drug trafficking.
Salami stressed the importance of regulating crypto exchanges rather than targeting them. By utilizing the regulatory framework set forth by the Nigerian SEC in 2022, authorities can mandate exchanges to disclose the identities of wallet holders engaged in suspicious activities, striking a balance between oversight and innovation.
She suggested that adopting global standards for crypto assets, such as those recommended by the Financial Stability Board, could offer a comprehensive solution to the concerns raised by Nigerian authorities and regulators worldwide, promoting clarity and consistency in regulating crypto asset activities.
In related news, the crackdown on cryptocurrency trading platforms in Nigeria earlier this year, particularly targeting Binance, has led to allegations of tax evasion against the popular exchange. The debate continues on whether meme coins are a betrayal of crypto’s principles or serve a true purpose in the digital currency space.