Experts and stakeholders in the blockchain industry have blamed the ongoing events around crypto trading in Nigeria on the policies and actions of the Central Bank of Nigeria (CBN), which tends to distance the regulator from the market.
According to them, the stance of the banking regulator could create a Pandora’s box of challenges that could open doors for bad actors.
They claim the ban may now allow those bad actors who were involved in currency manipulation through crypto trading to even inflict more damage on the economy.
The activities of the bad actors is believed to be denting the image of several legitimate players in the industry.
This comes as concerns mount over plans by the government to ban peer-to-peer (P2P) crypto trading in the country. Although some experts believe that banning P2P may not be feasible as people can exchange money under any guise, players in the industry are concerned that an outright ban would affect several platforms built to facilitate legitimate transactions.
Speaking on the current developments in the industry, the Co-founder of Convexity, a blockchain solutions company, Adedeji Owonibi, said the CBN under the former Governor, Godwin Emefiele, created the P2P market when he shut out banks from crypto transactions.
Owonibi’s thoughts aligned with that of the President of Stakeholders in Blockchain Association of Nigeria (SIBAN), Obinna Iwuno, who argued that if the CBN had regulated the industry, there would have been no rise in P2P because everybody would have been trading through regulated agencies and exchanges.
According to him, with accusing fingers pointed at P2P as sabotaging the economy, there might be more troubles for the industry, except the government sees the need to regulate it.
For the founder of Blockchain Nigeria User Group, Mr. Chuta Chimezie, the major issue in the blockchain industry is CBN’s inability to look into what the players are doing. He believes the exchanges handling P2P transactions are doing adequate KYC that could help the regulator in regulating the industry.
On plans to ban crypto P2P trading in Nigeria, Chimezie said the P2P market in Nigeria has now grown to become an extension of the forex black market. According to him, an outright ban would not help the country because people would always find ways around it by leveraging technology.
But he agreed that there has to be an intervention from the government to save the nation’s currency.
Recently, Nigeria’s National Security Adviser (NSA) classified cryptocurrency trading as a national security issue. Following this, the Central Bank of Nigeria (CBN) directed four fintech startups operating in the country—Opay, Moniepoint, Paga, and Palmpay—to block the accounts of customers engaging in cryptocurrency transactions and to report those transactions to law enforcement agencies.
Earlier in February this year, crypto trading platform, Binance, had to disable its peer-to-peer feature for Nigerian users as it came under the searchlight of the Nigerian government over allegations of currency manipulation and money laundering.
Meanwhile, on Monday, the Nigerian Securities and Exchange Commission (SEC), during a virtual meeting with the Blockchain Industry Coordinating Committee of Nigeria (BICCoN), called for a new cryptocurrency measure that aims to remove the naira as a currency pair from cryptocurrency peer-to-peer platforms.
The Acting Director General of the SEC, Dr. Emomotimi Agama, who made the call, emphasized the need to clean up the virtual assets space from illegal trading activities and safeguard the integrity of the Nigerian capital market. Agama noted that the recent surge in peer-to-peer (P2P) crypto trading has reportedly impacted the Naira’s exchange rate, prompting the SEC to consider delisting the Naira from P2P platforms to curb market manipulation.