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$26 Billion in Crypto Flows Raise Concerns in Nigeria, CBN Governor Vows Action

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CEM REPORT, FINANCE | The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has ignited a wave of discussion regarding cryptocurrency in the country by revealing a staggering statistic during a recent Monetary Policy Committee Meeting. According to Cardoso, a whopping $26 billion flowed through Binance Nigeria, a major cryptocurrency exchange, in just one year.

This revelation is particularly concerning for the apex bank, as Cardoso stated that the sources and users behind these transactions remain unidentified. This lack of transparency raises red flags for the CBN, which has a responsibility to protect Nigerians and ensure the stability of the financial system.

Cardoso emphasized the CBN’s commitment to address these concerns, stating, “We are determined to do everything it takes to ensure that we take charge of our market and not allow others to manipulate it.” This firm stance comes after Nigeria recently requested its telecommunication companies to restrict access to cryptocurrency websites. This move, aimed at curbing currency speculation, highlights the government’s evolving approach towards the crypto space.

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Nigeria’s Growing Crypto Adoption

However, it’s important to acknowledge the growing popularity of cryptocurrency in Nigeria. According to a blockchain research firm, Nigeria is one of the few countries whose crypto transaction volume increased despite global market turmoil. This surge in adoption is often attributed to Nigerians seeking to preserve the value of their savings against rising inflation, which currently sits at a worrying 29.90%.

Despite the recent regulatory efforts, it’s worth noting that the CBN officially lifted its ban on crypto transactions in December 2023. This move was seen as a sign of the government’s attempt to adopt a more nuanced approach to crypto regulation.

Binance’s Response

In response to the CBN’s concerns, Binance, the platform at the center of the controversy, has emphasized its commitment to open dialogue with regulators and policymakers. They maintain that their platform is not intended for currency pricing and actively seek to foster a transparent dialogue regarding the evolving nature of cryptocurrency and its impact on financial markets.

[READ ALSO] CBN vows to Recover N10 Trillion Intervention Loans and Fight Inflation

Road Ahead:

The recent developments surrounding cryptocurrency in Nigeria highlight the complex and often conflicting forces at play. While the CBN strives to protect the financial system and address concerns about potential illicit activities, the undeniable rise of crypto adoption cannot be ignored. As the situation unfolds, it will be crucial for both regulatory bodies and industry players to engage in constructive dialogue to navigate the rapidly evolving landscape of cryptocurrency and ensure a future that benefits all stakeholders.

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