Binance restricts USDT/NGN trading - TechGyant

Binance restricts USDT/NGN trading due to worsening Naira decline.

Binance-restricts-USDT-NGN-trading-due-to-worsening-Naira-decline.

Binance, the world’s biggest cryptocurrency exchange, has recently put a limit on peer-to-peer transactions trading the USDT/NGN pair, as the Nigerian naira reached record lows on Tuesday afternoon. The exchange, which serves as an escrow and enables Nigerians to trade their naira for USDT, a stablecoin that is pegged against the US dollar, says that this move safeguards users from potential fraud and manipulation.

For its Nigerian users, the cryptocurrency exchange has disabled the “sell” feature, which prevents them from selling USDT on its platform. Binance has also restricted Nigerian users’ buy option to a price of ₦1802. This is the second time in six months that the exchange is pegging USDT/NGN prices, following a similar move in December 2020 that saw the naira soar ₦300 against the dollar in a day of trading action. Unfortunately, that momentum was short-lived.

Binance announced in a blog post that they are working closely with local authorities, lawmakers, and regulators as industry leaders to ensure that they comply with non-compliance issues. In recent years, Nigerians have increasingly turned to Binance to purchase cryptocurrency as a hedge against inflation and currency devaluation. Binance has also become important for price discovery in Nigeria, where there are “official” and “parallel” market rates. The pegging of prices on Binance is linked to a perception that speculators on the exchange may be manipulating prices.

Despite the ban on Binance, traders are exploring other options. On Tuesday, the naira was trading at a low of ₦2000 to 1 USDT on Kucoin, a Binance competitor. Two crypto traders who spoke to TechCabal said that the volume of USDT transactions is not substantial enough to influence prices. One individual said, “We believe that if proper measures are implemented, we will be less concerned about cryptocurrency and focus on other areas that will increase our USD inflows.”

Since June 2023, the Central Bank of Nigeria (CBN) has eased currency controls and implemented a number of new policies aimed at reducing speculation and promoting efficient price discovery. However, a persistent liquidity issue and poor communication have hampered the bank’s efforts. This has resulted in a lack of confidence in the apex bank as it scrambles for solutions that can provide stability. This week, the Debt Management Office increased the yield for Nigerian bonds by up to 3% in the last month to absorb excess Naira liquidity and attract foreign investors. This is a developing story, and we will keep you updated.

Also read: Cryptocurrency: Ying or Yang?

Total
0
Shares
Leave a Reply

Your email address will not be published. Required fields are marked *

Previous Post
Apply-for-the-$500k+-Data-Economy-Hackathon.

Apply for the $500k+ Data Economy Hackathon

Next Post
Teraco-to-build-$106M-solar-plant-to-address-South-Africa's-power-problems.

Teraco to build $106M solar plant to address South Africa’s power problems.

Related Posts