Some Nigerian cryptocurrency enthusiasts are concerned that the decision to suspend naira trading on cryptocurrency exchanges could further harm the already unstable fiat currency.
Rume Ophi, the executive secretary of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), expressed in an interview with Cointelegraph that blaming global cryptocurrency platforms for the devaluation of the naira is not a practical approach. He believes that Nigeria has the potential to effectively regulate the cryptocurrency industry by following 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 attention towards platforms offering cryptocurrency services. These platforms have gained popularity for 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 that cryptocurrencies are unfairly being held responsible for devaluing national currencies. Instead of a complete ban, she recommended that Nigerian authorities implement a balanced regulatory approach, as there is no direct link between crypto and currency devaluation, despite its association with illicit activities like money laundering and drug trafficking.
Previously, Nigerian authorities cracked down on cryptocurrency trading platforms, attributing the rapid depreciation of the naira to these platforms earlier in 2024. Binance, in particular, faced various allegations, including tax evasion charges.
Salami stressed that regulation, rather than prohibition, could help Nigerian authorities achieve their objectives. By utilizing the regulatory framework established by the Nigerian SEC in 2022, authorities could mandate cryptocurrency exchanges to disclose the identities of wallet holders involved in suspicious activities, striking a balance between oversight and innovation.
According to the associate professor, adopting international standards for crypto assets, such as the recommendations of the Financial Stability Board, could offer a comprehensive solution to the concerns raised by Nigerian authorities and regulators worldwide, ensuring clarity and consistency in regulating crypto asset activities.
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