In a move that will impact cryptocurrency users in Nigeria, major exchange Binance announced its withdrawal from the Nigerian market, effectively stopping all services involving the Nigerian Naira (NGN). The announcement comes amidst ongoing tensions between cryptocurrency platforms and Nigerian authorities regarding financial regulations and the role of digital assets in the country's economy.
According to Binance's official statement, users have a limited window to manage their NGN holdings before the complete service discontinuation. The deadline for NGN deposits has already passed, and users are urged to withdraw their remaining NGN balance, trade it for other cryptocurrencies, or convert it to the Tether (USDT) stablecoin before March 8th, 2024.
NGN trading pairs will be removed from the platform entirely on March 7th, and any remaining NGN balances in user accounts will be automatically converted to USDT at a rate based on the average closing price of the USDT/NGN pair on Binance Spot over the preceding week. Binance Pay, the exchange's dedicated payment service, will also cease to support NGN as of March 6th.
This decision follows the delisting of NGN trading pairs from Binance's peer-to-peer (P2P) platform in late February 2024. The P2P platform allows users to directly trade cryptocurrencies with each other, and the delisting of NGN pairs effectively restricted Nigerians from using their local currency for P2P transactions on the platform.
The reasons behind Binance's exit from the Nigerian market remain unclear. However, the move coincides with increased scrutiny of cryptocurrency activities by the Nigerian government. In February 2021, the Central Bank of Nigeria (CBN) issued a circular prohibiting financial institutions from facilitating cryptocurrency transactions, citing concerns about money laundering and financial instability. While the CBN's directive was not directly aimed at cryptocurrency exchanges like Binance, it created an environment of uncertainty and potential regulatory hurdles for the industry in Nigeria.
The news of Binance's withdrawal has been met with mixed reactions from the Nigerian cryptocurrency community. Some users expressed disappointment and frustration, fearing limited access to cryptocurrency trading options. Others acknowledged the ongoing regulatory challenges and viewed Binance's decision as a pragmatic measure to avoid potential conflicts with authorities.
The long-term impact of Binance's exit on the Nigerian cryptocurrency market remains to be seen. However, the move undoubtedly marks a significant development in the ongoing dialogue between cryptocurrency platforms and regulatory bodies in Nigeria. It also highlights the evolving landscape of cryptocurrency regulation globally, as governments grapple with the potential benefits and risks associated with digital assets.