Some Nigerian cryptocurrency enthusiasts are concerned that the decision to cease naira trading on cryptocurrency exchanges in the country may further destabilize the already volatile fiat currency.
In a recent interview with Cointelegraph, Rume Ophi, the executive secretary of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), dismissed the official Nigerian stance that global cryptocurrency platforms are to blame for the depreciation of the naira as unrealistic.
Ophi suggested that Nigeria could effectively regulate the cryptocurrency industry by implementing the framework introduced by the Nigerian Securities and Exchange Commission (SEC) in 2022.
With the naira rapidly declining and inflation reaching a nearly three-decade high of 29.9%, the government has shifted its focus towards platforms offering cryptocurrency services, which have gained popularity for trading and setting an informal value for the naira.
In a recent article, Iwa Salami, an associate professor at the University of East London, argued that cryptocurrencies have been unfairly scapegoated for devaluing national currencies. She recommended that Nigerian authorities adopt a more balanced regulatory approach instead of an outright ban, noting that while crypto has been associated with illicit activities like money laundering and drug trafficking, there is no direct link to currency devaluation.
Salami stressed the importance of regulating crypto exchanges rather than targeting them. Following Nigeria’s crackdown on cryptocurrency trading platforms earlier in 2024, which was blamed for the rapid depreciation of the naira, authorities have focused on scrutinizing platforms like Binance, which has faced accusations of tax evasion.
She proposed that Nigerian authorities leverage the regulatory framework established by the SEC in 2022 to require cryptocurrency exchanges to disclose the identities of wallet holders involved in suspicious activities, striking a balance between oversight and innovation.
According to Salami, adopting international standards for crypto assets, such as the recommendations of the Financial Stability Board, could provide a comprehensive solution to the concerns raised by Nigerian authorities and regulators worldwide, promoting clarity and consistency in regulating crypto asset activities.
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