Nigeria is set to remove the naira from all Peer-to-Peer (P2P) crypto platforms to curb the manipulation of its local currency in the foreign exchange market. This significant move was disclosed by Emomotimi Agama, the Director General of the Securities and Exchange Commission, during an interactive session with stakeholders from the Nigerian Blockchain Industry.
The decision to delist the naira from P2P platforms forms part of the upcoming regulatory measures aimed at tightening oversight of the crypto industry in Nigeria. Emphasizing the necessity of this action, Agama highlighted the rampant manipulation of the naira and stressed the importance of collaboration from all stakeholders to safeguard the integrity of the crypto space.
This development follows a recent directive from the Central Bank of Nigeria (CBN) to fintech companies, instructing them to warn customers against engaging in crypto transactions. Subsequently, several fintech firms, including OPay, PalmPay, and Kuda Bank, announced the closure of accounts involved in crypto or virtual asset transactions, citing regulatory compliance concerns.
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The move to freeze accounts is part of a broader investigation by the Economic and Financial Crimes Commission (EFCC) into suspected illegal activities related to cryptocurrency platforms. Fintechs have been requested to temporarily suspend new account openings pending the CBN’s evaluation of their Know Your Customer processes.
Tosin Eniolorunda, CEO of Moniepoint, echoed regulatory concerns, urging participants in crypto P2P transactions to cease their activities due to regulatory prohibitions in the financial sector.
Nigeria’s stance on cryptocurrency has evolved since the CBN’s ban on banks and financial institutions from dealing in crypto assets in February 2021, leading to the rise of P2P crypto trading. The recent focus on P2P transactions is part of the government’s broader crackdown on crypto platforms, with particular attention on Binance, which ceased naira operations following regulatory pressure and faced executive arrests.
Officials attribute the devaluation of the naira to crypto platforms, with estimates suggesting significant sums flowed through Binance Nigeria from unidentified sources. However, crypto experts anticipate that delisting the naira from P2P platforms may intensify pressure on the currency, potentially driving increased demand for dollars among traders.
Stakeholders expect the delisting to be temporary until regulations for virtual asset providers are established, signaling a dynamic regulatory landscape for the crypto industry in Nigeria.
