Binance temporarily suspended deposits in Nigerian naira - the country's local fiat currency - in response to a Friday letter from the Nigerian Central Bank (CBN) urging local banks to identify and close all accounts linked to cryptocurrency platforms or operations. .
Binance: Nigerian naira deposits suspended
The CBN letter to local banking institutions specified that trading cryptocurrencies or facilitating payments for cryptocurrency exchanges are prohibited under a 2017 circular stating that bitcoin (quotation BTC) and other cryptocurrencies are not legal tender in the country.
Although the central bank's action could impact fiat on / off ramps, most of the nation's cryptocurrency trading takes place on peer-to-peer platforms and remains unaffected, according to sources in Nigeria.
In a statement, Binance announced that its Nigerian naira payment partners have suspended deposit services until further notice, starting at 19:00 local time (GMT +1) on Friday, adding that it is closely monitoring the situation. "The pickup services remain normal and will continue to be processed, but may take slightly longer than usual," the statement said.
The ban of the Nigerian Central Bank
The CBN directive comes a few months after protesters in Nigeria used bitcoin to raise money for protests against violent police methods. Since the letter started circulating on the internet, Nigerian crypto sphere users have tweeted the hashtag #WeWantOurCryptoBack over 26.000 times, according to data obtained by SproutSocial.
But professionals in the crypto space don't believe the panic will last or impact cryptocurrency adoption. Nigerian-based blockchain and software engineer Tosin Olugbenga said the CBN may have issued the directive due to the price bitcoin reached recently and because the growing interest in cryptocurrencies around the world is causing Nigerians to decide to convert their earnings into cryptocurrencies.
“They are shifting money from naira to cryptocurrencies. This is what it appears to be and is what CBN has challenged. It does not prohibit crypto trading. It is just telling financial institutions not to allow their platforms to be used to buy or sell cryptocurrencies on exchanges like Binance, ”Olugbenga said.
“The news has caused panic in the crypto space, especially for new investors in the industry, but the real essence of crypto is decentralization. Most cryptocurrency exchanges that take place in Nigeria are peer-to-peer, ”said Aronu Ugochukwu, CEO of the DeFi Xend Finance platform.
So far, CBN has not provided an official explanation for the sudden decision. Nigeria is the latest country, in chronological order, to engage in space regulation: India is once again considering a ban on private cryptocurrencies. Meanwhile, European Central Bank President Christine Lagarde said bitcoin favors questionable transactions and should be regulated on a global scale.
