Binance Exits Nigeria: A Catastrophe For Crypto Enthusiasts Or A Nirvana For Naira?
By Chidiebere Sullivan Nwuguru
Nigeria, being the most populous black nation is no surprise a land of vibrant markets with a burgeoning Tech presence. Surprisingly, there has been a recent upheaval in the country's cryptocurrency world, prompting the departure of Binance, one of the leading exchange platforms for the cryptocurrency markets, thus, leaving a trail of bewilderment and mixed feelings in its wake. Up to date, the true reason behind the exit of Binance from Nigeria is still a puzzle as gloomy as a Lagos lagoon after a heavy downpour, to the citizens. Some speculations going around have it that the exit was due to stringent regulations by the Central Bank of Nigeria (CBN) which might have been unconducive for the crypto kingpin (Binance). Another angle has it that it could be as a result of the difficulty in navigating through the heavily fluctuating financial landscape of the Nigerian economy, especially as it is currently encountering a huge bout of inflation and devaluation of the Naira. Whatever the reason, the absence of clarity in this case, leaves crypto enthusiasts, in Nigeria, with more questions than answers.
As the situation of things stands currently, we are still unsure of what the potential impact of Binance's exit would be. However, since the departure, we have witnessed the Naira gaining considerable value as against the dollar, but the perplexity is that one can't clearly link the exit of Binance from Nigeria to the Naira gaining more valuation ever since, except based on speculations. Also, judging from the fact that cryptocurrency over the years, has grown to become a widely accepted means of exchange, the exit of Binance may likely impact on the country's international market. Inversely, for a country battling heavy devaluation of its currency, one could argue that the presence of Binance was always going to leave more adverse effects on the devalued Naira which is currently battling fluctuations, especially with how easy Binance makes it for anyone who wishes to transact internationally, and the potential for big returns for such a person, especially since gaining a little amount of dollars translates to a huge sum when converted into Naira. Hence, the reason more people would be tempted to engage in this sort of exchange which may also be argued as one of the contributing factors to the Naira devaluation.
However, I believe that the ability to improve on our export market, and our ease to exit immediately from a sole consumption-dependent economy, while learning to rely more on a productive-based economy is all we need to improve the dwindling value of the Naira, else, we may just be chasing shadows with the thinking that the crypto markets are the bane behind the current devaluation of the Naira. Again, even with the exit of Binance, other local exchanges and peer-to-peer platforms would likely emerge to fill the void for crypto marketers.
The sudden departure of Binance has continued to raise more dust of controversies which has in turn sparked a brimming firestorm of reactions from the public. Recently, it was everywhere in the news that the Nigerian government detained two high-ranking Binance board members who came down to Nigeria for a parley with the government. Somewhere also in the news, it was gathered that these two officers after having spent weeks in detention, suddenly escaped mysteriously from their dungeons of captivity without a trace, and now Binance has gone ahead to sue the federal government of Nigeria. This kind of scenario is what I believe we should avoid as a country that is built under the rule of law, especially since this kind of situation will keep scaring away potential foreign investors from coming to invest in the country, which will in turn help in the Naira appreciation. Hopefully, the government will learn to handle this better going forward.
While we somehow believe that the take of the government against Binance, or rather the exit of Binance, is a necessary evil to protect the value of the Naira in this time of economic crisis, we must not rely on these kinds of measures as a way to save the face of our currency. The government should instead, proffer suitable measures that will change our economy from a mere consumptive one to a very productive kind of economy. I equally believe that the exit of Binance will not be the end of tech adoption in our economy. Perhaps, this push-back could be all we need to rejuvenate the vital discussion around the regulations, innovations, and building of a brighter future for our financial markets, which would see us become a force to reckon with when it comes to the African fintech.
Until then, let's buckle up and hope for the best.
