The constitutional roles and functions of the Central Bank of Nigeria were enshrined in the 1958 Act of Parliament, and as amended in 1991, 1993,1997, 1998, 1999, and 2007 respectively.
More importantly, the Central Bank of Nigeria Act of 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, but are not limited to: ensuring monetary and price stability, issuing legal tender currency in Nigeria, and maintaining external reserves to safeguard the international value of the legal lender currency.
Others are promoting a sound financial system in Nigeria, and last but not the list Act as Bankers and provide economic and financial advice to the Federal government.
In line with the optimal function of the Nigeria’s Apex Bank, on February 3, 2024, is issued a directive to the International Monetary Transfer Operators (IMTOs) to halt facilitation of dollar transfers to and from Nigeria to other countries.
The new directive also restricts inbound transfers to the naira equivalent of every dollar transfer and compels the IMTOs to quote exchange rates for naira rates at the nation’s official foreign exchange market (FX).
Furthermore, as the naira continued its downward trend against the United States dollar at the official and parallel foreign exchange markets, much to the despair of citizens, it recorded a new all-time low for the naira which depreciated to N1,730/$.
The development led operatives of the Economic and Financial Crimes Commission (EFCC), to raid some Bureau De Change operators’ outlets in Abuja on Monday, arresting currency traders suspected to be speculating against the naira.
This represents N60 or 3.59 percent drop from N1,670/$ recorded at the close of trade at the black market on Friday.
The naira depreciation followed a strong demand for dollars by speculators as well as individuals traveling for business, tourism, education, and health, according to currency dealers. Meanwhile, the naira was exchanged above N2,000 against the Great Britain Pound at the parallel market on Monday but sold at 1931/£ at the official market, according to the Central Bank of Nigeria exchange.
However, In a recent twist, the Nigerian government asked the telecommunications firms to restrict access to the websites of cryptocurrency firms such as; Binance, OctaFX, Coinbase and others, months after its Central Bank issued a guideline to govern digital asset operators’ activities.
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 disregard its February 2021 ban on crypto transactions.
This new restriction on crypto websites is aimed at slowing 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.
One user on X, @MikaelCBernard, tweeted,
“There’s no more dollars available on Binance oh. It is like Binance traders have gone on strike. You can only sell, but you can’t buy”.
While noting its commitment to a market-driven, fraud-free, and manipulation-free platform for its users, Binance said, “Furthermore, as industry leaders, we are working hand in hand with local authorities, lawmakers, and regulators to ensure we act on non-compliance.”
Later on Wednesday, the firm confirmed that it has paused transactions to protect users from price suppression.
Addressing rumours that currency speculation was thriving on its platform, the firm said, “It is important to note that foreign exchange rates are influenced by various complex factors, which Binance does not influence on.
“However, we continue to actively engage with regulators, policymakers, and other relevant stakeholders to foster an open, transparent dialogue about managing the evolving landscape of cryptocurrency and financial markets.”
However, in a move that began as a rumour, the Nigerian Communications Commission has asked telecom firms to block access to the websites of Binance and other cryptocurrency firms.
According to a top source in the telecoms industry, telcos got a directive from the commission today.
The restriction is to take effect immediately, the source added. There is no timeline yet for this restriction.
When Nigeria blocked access to Twitter in 2021, it asked telcos to restrict access to the platform.
It is instructing to note that, revenue in the Cryptocurrencies market is projected to reach US$32.6m in 2024, showing an annual growth rate (CAGR 2024-2028) of 12.66% resulting in a projected total amount of US$52.5m by 2028.
The average revenue per user in the Cryptocurrencies market amounts to US$7.0 in 2024. From a global comparison perspective, it is shown that the highest revenue is reached in the United States (US$23,220.00m in 2024).
In the Cryptocurrencies market, the number of users is expected to amount to 6.32m users by 2028. User penetration will be 2.03% in 2024 and is expected to hit 2.52% by 2028.
Nigeria’s interest in Bitcoins reached a peak during the summer of 2020, reaching the highest level since early 2018.
This conclusion reveals itself after investigating Bitcoin trading volume against domestic currencies used for the transaction of the virtual currency.
The African country was said to be one of the three countries with the most Bitcoin trading in the world in 2020.
It is estimated that over 22 million people, 10.3% of Nigeria’s total population, currently own cryptocurrency.
State of Crypto in Nigeria 47% of Nigerians are Actively Involved in Crypto Trading, whilst 27% of Nigerians are actively engaged with crypto, a new study shows as the country finds safety in the currency amid worries about the foreign exchange rate.
According to insights by CoinJournal shared with Business Post, cryptocurrencies, including Bitcoin (BTC) and various alternatives, are no longer just investments for speculation, “They represent a significant change in how people view and use money, providing decentralized options compared to traditional financial systems.”
Again, Nigeria is ranked as the top country for cryptocurrency usage and ownership. With 45% of its population using or owning cryptocurrency in 2022, other top countries include Thailand 44%, Turkey 44% and the United Arab Emirates 34%.
But the United States is ranked 22nd on the list, with only 16% of the population owning or suing cryptocurrency, while the United Kingdom ranks 50th with 11% ownership and usage.
With Nigeria’s staggering youth unemployment pegged at 53.4%, it can be implied that the majority of those deals are in digital assets in Nigeria.
This recent restriction on Binance and progressive restriction by the telecos will make the use of Virtual Private Networks (VPN) a succour 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 overcome online censorship, torrent it anonymously, and access your favourite streaming services when traveling.
Nigeria’s social media has been littered with several crypto stakeholders advising their community on using Virtual Private Networks in the face of this ban. Despite this, Binance is currently embroiled in regulatory issues in the US.
The firm recently agreed to record $4.3 billion fine, its former CEO, Changpeng Zhao, is in the US awaiting sentencing. However, these challenges notwithstanding, Binance’s data reflects robust activity for its USDT/NGN trading pair, with nearly 5 billion Naira in trades, equivalent to $3million, within the last 24 hours.
However, considering the legality and complexity revolving around Virtual Private Networks (VPN) and the seeming commitment of the Federal Government of Nigeria to carry out its reform on Foreign Exchange, no one can predict with exactitude where and how the Federal Government of Nigeria chose to wild its big stick.
Already, the Special Special Adviser to President Bola Tinubu on Information and Strategy, Mr. Bayo Onanuga has called for the ban of Binance, Kucoin, and other trading platforms in Nigeria.
Onanuga accused the platforms of manipulating the naira leading to the continued fall of the Nigerian currency in the forex market. This is coming amid speculations that the government is already considering the ban.
The President’s Adviser urged the Economic and Financial Crimes Commission (EFCC) and the Central Bank of Nigeria (CBN) to take swift action to end the operations of the crypto exchanges in the country.
Calling for the ban via a post he titled “the Naira-Dollar manipulators” on X, Onanuga accused Nigerians trading currency on the Binance platform of unpatriotism.
The question remains, Can VPN Safe Cryptocurrency Traders?
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