Experts and crypto enthusiasts are expressing concern over the recent ban on Binance naira operations in Nigeria, warning of potential repercussions on youth unemployment in the country.
In interviews with The Media Talk Africa, experts emphasized the need for the government to find more effective solutions to address Nigeria’s foreign exchange challenges. Shedrach Israel, an economist at Lotus Beta Analytics, criticized the ban on Binance, likening it to “treating malaria with paracetamol.” He argued that the ban would not resolve the underlying issues causing the depreciation of the naira.
Israel urged the Central Bank of Nigeria (CBN) to investigate the forex holdings of top Nigerian politicians, suggesting that forcing them to convert their foreign currency to naira could be more impactful than banning Binance. He also questioned the effectiveness of the ban, pointing out that Binance’s peer-to-peer trading model involves both inflow and outflow of naira in the economy.
The National Bureau of Statistics reported a 7.2% unemployment rate among youth aged 15-24 in Q2 2023, with an estimated 22 million Nigerians owning digital currency. The Securities and Exchange Commission of Nigeria declared Binance Nigeria as illegal and unauthorised, while the CBN reversed its ban on crypto transactions in December 2023.
Cryptocurrency trader John Odiba acknowledged the potential negative impact of Binance’s exit on Nigerian users but also highlighted opportunities for local cryptocurrency exchanges to thrive. He noted that while the absence of Binance may lead to higher transaction costs and limited access to certain cryptocurrencies, it could also pave the way for the growth of local alternatives like the eNaira.
For Godwin Ojonugwa, a Binance peer-to-peer trader, the ban has had a direct impact on his livelihood. He credited Binance for enabling him to fund his education and build a home, expressing fear of losing his source of income due to the restrictions.
The ban on Binance in Nigeria has sparked a debate among experts and users, highlighting the complex interplay between cryptocurrency regulation, economic policy, and individual livelihoods. As the country navigates these challenges, the future of digital currency in Nigeria remains uncertain.
