The Nigerian government’s position on the crypto industry needs to be clarified, as its recent actions have caused confusion among the wider community, according to Nathaniel Luz, co-founder and CMO of Flincap, a local crypto over-the-counter exchange.
Reports have emerged from local crypto users who are unable to access the websites of various crypto exchanges, such as Binance and OctaFX, using traditional telecommunication providers. This has led to speculation about a potential government ban on crypto platforms.
Luz, in an interview with Cointelegraph, expressed the belief that the Nigerian government does not seem to be interested in fostering a positive relationship with individuals in the crypto space. The government attributes the current exchange rate of 1,800 Nigerian naira to $1 to OTC traders trading Tether for naira on the peer-to-peer market.
However, Luz argues that blaming OTC traders for the current value of the naira is incorrect, as the crypto industry is not responsible for the economic downturn or the decline of the naira. He lists various factors, such as excess naira, insufficient amounts of US dollars, heavy reliance on imports, emigration from the country, currency exchange, and uncertainty surrounding Eurobond payments, as unrelated to the local crypto industry.
In December 2023, the Nigerian government lifted a crypto ban imposed by the country’s Securities and Exchange Commission and the Central Bank of Nigeria in 2021. This allowed crypto exchanges to apply for licenses in Nigeria. However, many crypto startups are still working towards meeting the licensing criteria, which includes a paid-up capital of 500 million naira ($340,000) and an application fee of 30 million naira ($20,000).
Luz suggests that the Nigerian government would be better served by addressing the licensing issues for local exchanges instead of blaming the local crypto ecosystem for its foreign exchange problems.
Nigeria currently holds the title of the largest peer-to-peer market in the world, a status that arose after the Central Bank of Nigeria banned institutions from buying and selling crypto in 2021.