Binance, the leading cryptocurrency exchange, has imposed a price limit on the selling of Tether (USDT) tokens on its peer-to-peer (P2P) platform in Nigeria. The maximum selling price for USDT on Binance’s P2P platform is currently set at 1,802 naira per USDT, in line with regulatory requirements in Nigeria.
In a statement to Nigerian users, Binance emphasized its commitment to collaborating with local authorities, lawmakers, and regulators to ensure compliance with the prescribed price cap. The exchange’s P2P platform enables users to directly buy and sell cryptocurrencies for fiat currency with other users.
Addressing concerns about the price peg, Binance clarified that the imposed price cap was a result of an automatic system pause triggered during periods of significant currency fluctuations. While this temporary suppression of prices occurred, necessary adjustments have been made to facilitate continued trading on the platform.
The Office of the National Security Adviser, in conjunction with the Central Bank of Nigeria (CBN), has initiated a collaborative effort to combat forex speculation and address economic stability issues in the country. This initiative aims to curb the activities of speculators, both domestic and international, which have contributed to the depreciation of the naira and exacerbated inflation.
The unification of forex windows by the Nigerian government in mid-2023 led to a significant depreciation of the naira against the US dollar, resulting in economic instability. The exchange rate doubled from approximately 700 naira/$1 to a historic high of over 1,500 naira/$1.
In July 2023, the Nigerian Securities and Exchange Commission (SEC) cautioned local investors against using Binance, citing its lack of operating license in the country. The SEC reiterated that Binance’s operations were illegal and highlighted the associated risks, including potential total loss of investments.
Nigeria has emerged as the largest P2P cryptocurrency market globally, driven by the ban on crypto transactions by institutions in 2021. However, a circular issued to banks in December 2023 lifted the ban, allowing Nigerian banks to facilitate cryptocurrency transactions. The attractiveness of P2P transfers is further enhanced by lower fees compared to traditional banking channels for foreign exchange transactions.
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