Some Nigerian crypto enthusiasts believe that halting naira trading on cryptocurrency exchanges will worsen the volatile fiat currency’s situation.
Rume Ophi, executive secretary of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), told Cointelegraph that blaming global cryptocurrency platforms for the naira’s depreciation is impractical.
Ophi emphasized that Nigeria can regulate the cryptocurrency industry effectively through a framework introduced by the Nigerian Securities and Exchange Commission (SEC) in 2022.
The naira’s rapid decline and the resulting inflation rate of 29.9%, a nearly three-decade high, have led the government to focus on platforms providing cryptocurrency services.
These platforms have become popular for trading and establishing an informal value for the naira.
In an opinion piece, Iwa Salami, an associate professor at the University of East London, argued that cryptocurrency has been unfairly blamed for devaluing national currencies.
She suggested that Nigerian authorities adopt a balanced regulatory approach rather than a complete ban.
Salami noted that while crypto is associated with money laundering and the drug trade, it has never been directly linked to currency devaluation:
“Nigeria needs a balanced approach to regulation if the industry is to thrive without harming financial and monetary stability.
A stable financial system can allocate resources efficiently and manage financial risks.
The approach must protect consumers and investors.”
Cointelegraph previously reported on Nigeria’s crackdown on cryptocurrency trading platforms.
Authorities blamed these platforms for the naira’s rapid depreciation earlier in 2024, scrutinizing Binance, which faced several charges, including tax evasion.
Salami emphasized that Nigerian authorities could achieve their goals through regulation instead of prohibition.
By leveraging the 2022 regulatory framework established by the Nigerian SEC, authorities can require cryptocurrency exchanges to reveal the identities of wallet holders connected to suspicious activities, balancing oversight and innovation.
According to Salami, the global adoption of international standards for crypto assets, such as the Financial Stability Board’s recommendations, would provide a unified solution to concerns raised by Nigerian authorities and other regulators worldwide.
This would promote clarity and consistency in regulating crypto asset activities.
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