The constitutional roles and functions of the Central Bank of Nigeria were enshrined in the Parliament Act of 1958 and amended in 1991, 1993, 1997, 1998, 1999 and 2007 respectively.
More importantly, the Central Bank of Nigeria Act 2007 of the Federal Republic of Nigeria charges the Bank with the overall control and administration of the monetary and fiscal sector policies of the Federal Government.
The objectives of the Central Bank of Nigeria also include, among others: ensuring monetary and price stability, issuing legal tender in Nigeria and maintaining external reserves to safeguard the international value of the legal lender's currency.
Others are promoting a sound financial system in Nigeria and last but not on the list, they act as bankers and provide economic and financial advice to the federal government.
In line with the optimal functioning of the Apex Bank of Nigeria, a directive to International Money Transfer Operators is issued on February 3, 2024 (ITTO) to stop the facilitation of dollar transfers to and from Nigeria to other countries.
The new directive also restricts incoming transfers to the naira equivalent of each dollar transfer and forces IMTOs to quote naira exchange rates on the country's official foreign exchange (FX) market.
Furthermore, as the Naira continued its downward trend against the United States Dollar in the official and parallel currency markets, to the despair of citizens, a new all-time low was recorded for the Naira, which depreciated to 1,730 naira per dollar.
This development prompted operatives of the Economic and Financial Crimes Commission (EFCC) to raid some establishments of foreign exchange operators in Abuja on Monday, arresting foreign exchange traders suspected of speculating in the naira.
This represents a drop of N60 or 3.59 per cent from N1,670/$ recorded at the close of black market trading on Friday.
The naira's depreciation followed strong demand for dollars from speculators as well as people traveling for business, tourism, education and health, according to currency traders. Meanwhile, the naira traded above N2,000 against the pound sterling in the parallel market on Monday, but sold at 1931/£ in the official market, according to the Central Bank of Nigeria.
However, in a recent twist, the Nigerian government asked telecommunications companies to restrict access to the websites of cryptocurrency companies such as; Binance, OctaFX, Coinbase and others, months after its Central Bank issued a guideline to govern the activities of digital asset operators.
Implicit to note is the fact that in December 2023 the Central Bank of Nigeria changed its stance on crypto assets and asked banks to ignore its February 2021 ban on cryptocurrency transactions.
This new restriction on cryptocurrency websites is aimed at curbing currency speculation activities in the country, with Binance stating that its platform is not for currency pricing.
The platform said this after users complained about their inability to buy dollars.
An X user, @MikaelCBernard, tweeted:
“There are no more dollars available on Binance, oh. It is as if Binance traders have gone on strike. It can only be sold, but it cannot be bought.”
While highlighting its commitment to a market-driven platform free of fraud and manipulation for its users, Binance said: "In addition, as industry leaders, we are working hand in hand with local authorities, legislators and regulators to ensure that act in case of non-compliance.”
Later on Wednesday, the company confirmed that it had paused transactions to protect users from rising prices.
Addressing rumors that currency speculation was thriving on its platform, the firm said: “It is important to note that exchange rates are influenced by several complex factors, which Binance does not influence.
"However, we continue to actively engage with regulators, policymakers and other relevant stakeholders to foster an open and transparent dialogue on managing the changing landscape of cryptocurrencies and financial markets."
However, in a move that began as a rumour, the Nigerian Communications Commission has asked telecommunications companies to block access to the websites of binance and other cryptocurrency companies.
According to a top telecom industry source, telecom companies today received a directive from the commission.
The restriction will take effect immediately, the source added. There is no timetable yet for this restriction.
When Nigeria blocked access to Twitter in 2021, it asked telecommunications companies to restrict access to the platform.
It is instructive to note that revenue in the cryptocurrency market is projected to reach US$32.6 million in 2024, showing an annual growth rate (CAGR 2024-2028) of 12.66%, resulting in a projected total amount of 52.5 million US dollars by 2028.
The average income per user in the Cryptocurrency market amounts to US$ 7.0 in 2024. From a global comparison perspective, it shows that the highest income is achieved in the United States (US$ 23,220.00 million in 2024).
In the cryptocurrency market, the number of users is expected to reach 6.32 million by 2028. User penetration will be 2.03% in 2024 and is expected to reach 2.52% by 2028.
Nigeria's interest in Bitcoins peaked during the summer of 2020, reaching the highest level since early 2018.
This conclusion is revealed after investigating the trading volume of Bitcoin against the national currencies used for the transaction of the virtual currency.
The African country was said to be one of the top three Bitcoin trading countries in the world in 2020.
It is estimated that more than 22 million people, 10.3% of Nigeria's total population, currently own cryptocurrencies.
State of Cryptocurrencies in Nigeria 47% of Nigerians are actively involved in cryptocurrency trading, while 27% of Nigerians are actively involved in cryptocurrencies, new study shows as country finds security in currency amid concerns about the exchange rate.
According to CoinJournal insights shared with Business Post, cryptocurrencies, including Bitcoin (BTC) and several alternatives, are no longer just investments for speculation: "They represent a significant change in the way people view and use money, providing decentralized options compared to traditional finance." systems.”
Once again, Nigeria ranks first in cryptocurrency usage and ownership. With 45% of its population set to use or own cryptocurrencies by 2022, other top countries include Thailand (44%), Turkey (44%), and the United Arab Emirates (34%).
But the United States is 22nd on the list, with only 16% of the population owning or demanding cryptocurrencies, while the United Kingdom is 50th with 11% owning and using it.
With Nigeria's staggering youth unemployment standing at 53.4%, it can be implied that most of those deals are in digital assets in Nigeria.
This recent restriction on Binance and the progressive restriction by telecom companies will make the use of virtual private networks (VPN) a boon for cryptocurrency traders.
VPN gives an extra layer of privacy and anonymity to hide our activity and location, avoiding hackers and trackers (especially on public WIFI).
A VPN also helps you bypass online censorship, download torrents anonymously, and access your favorite streaming services when you travel.
Nigerian social media has been abuzz with various cryptocurrency stakeholders advising their community on the use of virtual private networks in the face of this ban. Despite this, Binance is currently embroiled in regulatory issues in the United States.
The company recently agreed to a record $4.3 billion fine; Its former CEO, Changpeng Zhao, is in the United States awaiting sentencing. However, despite these challenges, Binance data reflects solid activity for its USDT/NGN trading pair, with almost 5 billion naira in transactions, equivalent to $3 million, in the last 24 hours.
However, considering the legality and complexity that revolve around Virtual Private Networks (vpn) and the apparent commitment of the Federal Government of Nigeria to carry out its foreign exchange reform, no one can predict exactly where and how the Federal Government of Nigeria decided to wield its big stick.
President Bola Tinubu’s Special Adviser on Information and Strategy, Mr. Bayo Onanuga, has already called for a ban on Binance, Kucoin and other trading platforms in Nigeria.
Onanuga accused the platforms of manipulating the naira, leading to the continued decline of the Nigerian currency in the foreign exchange market. This comes amid speculation that the government is already considering a ban.
The President's advisor urged the Economic and Financial Crimes Commission (EFCC) and the Central Bank of Nigeria (CBN) to take swift action to end the operations of crypto exchanges in the country.
Calling for the ban through a post he titled “naira dollar manipulators” on X, Onanuga accused Nigerians trading currencies on the Binance platform of anti-patriotism.
The question remains: Can VPN protect cryptocurrency traders?
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/dlnews/EWK6LF7DAZCYPFU7OGPEOHIVFY.jpg?w=75&resize=75,75&ssl=1 "Nigeria watchdog probes crypto market manipulation after currency crash")
