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HomeBusiness NewsABCON Urges Nigerian Government to Suspend Binance Operations Amid Naira Pressure Concerns

ABCON Urges Nigerian Government to Suspend Binance Operations Amid Naira Pressure Concerns

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The Association of Bureaux De Change Operators of Nigeria (ABCON) has issued a compelling call to the Nigerian government, urging them to enforce a ban on the operations of Binance, a globally recognized online cryptocurrency exchange. The move follows ABCON’s identification of Binance as a major contributing factor to the escalating pressure on the Nigerian naira.

Alhaji Aminu Gwadebe, the President of ABCON, articulated this pressing concern during a comprehensive interview held in Lagos on Tuesday. Gwadebe shed light on the growing influence of Binance’s trading activities, which have become a defining influence on both the Investor and Exporters window and the parallel market, raising concerns about the stability of the naira.

Binance, renowned for its platform catering to a diverse array of cryptocurrencies, boasts exceptional liquidity, with a capacity to support approximately 1.2 million transactions every second. Gwadebe underscored the necessity for a strategic response capable of mitigating the impact of Binance’s dominance within the local market.

“In this competitive landscape, the prudent approach is to restrict Binance’s activities by fostering increased liquidity. Presently, Binance ranks as the most liquid market, facilitating an astonishing 1.2 million transactions per second. However, we firmly believe that, despite this formidable status, we can challenge its prominence through the application of our indigenous resources and unique market dynamics,” Gwadebe emphasized.

Expressing deep concerns regarding the current foreign exchange market dynamics, Gwadebe observed a significant shift from an atmosphere of optimism to one of pessimism among investors. This transformation in sentiment, he noted, could erode public confidence in the market, a critical element underpinning any nation’s currency stability.

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“We are witnessing a transition from optimism to pessimism, leading to a notable decrease in investor participation. This, in turn, is eroding the trust of Nigerian citizens in the financial market. Our current reliance on external injections of capital for short-term relief is indicative of this shift,” he commented.

The ABCON President attributed the mounting pressure on the naira to a multifaceted combination of factors, including foreign exchange hoarding perpetrated by financial institutions and oil corporations, speculative trading, and currency round-tripping. He acknowledged that a comprehensive approach is required to address these pressing challenges and ensure the resilience of the Nigerian currency.

Gwadebe’s optimism extended to recent policy changes, particularly the removal of petrol subsidies. He expressed confidence that this adjustment would enable the Central Bank of Nigeria to receive substantial remittances from the Nigerian National Petroleum Corporation (NNPC), potentially augmenting the apex bank’s liquidity reserves. Additionally, he emphasized that the implementation of a transparent and competitive foreign exchange system could serve as a magnet for attracting further investor interest.

In his address, Gwadebe made a fervent appeal to the National Assembly to enact legislation that would safeguard investor interests within the market. He stressed the importance of establishing protective measures to create a secure and conducive trading environment.

Addressing the recent revocation of licenses from 2,698 Bureaux De Change (BDCs) by the Central Bank of Nigeria, Gwadebe raised doubts about the veracity of the reported list and clarified that an official list of affected entities is yet to be confirmed.

Gwadebe concluded by reaffirming ABCON’s commitment to constructive engagement with the Central Bank of Nigeria, with an aim to educate its members about the regulatory landscape governing their operations and responsibilities. This includes the pivotal obligation to report returns to the Central Bank.

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Digital pennyvest spoke with Osagie Efosa an active user of binance, he said “The notion of ABCON proposing a ban on Binance operations in Nigeria is honestly quite amusing. As an active Binance user, I’ve experienced firsthand the convenience and opportunities the platform offers. Instead of restricting a global powerhouse like Binance, which is almost impossible perhaps ABCON and the government should focus on collaborating with industry experts to find more effective alternatives that can address the concerns while still fostering innovation and growth in the cryptocurrency market. Banning Binance operations would only limit our options and hinder the potential benefits it brings to both traders and the broader economy.”

As the debate surrounding Binance’s role in Nigeria’s financial ecosystem intensifies, market participants, experts, and the public remain eagerly attentive to the unfolding narrative, anticipating the future directions that this discourse may take.

 

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