February 29, 2024

Presidential spokesman, Bayo Onanuga, says if not stopped, cryptocurrency trading website Binance will destroy the Nigerian economy by arbitrarily fixing foreign exchange rate.

“If we don’t clamp down on Binance, it will destroy the economy of this country. They just fix the rate,” a displeased Onanuga said on Channels Television’s Politics Today programme on Wednesday.

“We have saboteurs. Look at what Binance is doing to our economy. That is why the government moved against Binance. Some people sit down using the cyberspace to dictate even our exchange rate, hijacking the role of the CBN.

“They just sit down and fix anything they like. It’s a sabotage and we are trying to prevent that from happening henceforth,” he stated.

‘Black Market Illegal, Importers Profiteering’
The presidential aide further urged Nigerians to stop patronising the parallel market for FX rates, saying the website of the apex bank is the only legal platform.

“The parallel market is not the real gauge of Nigeria’s economic health. The parallel market is an illegal market.

“I don’t even know why Nigerians and the media are feeding on the parallel market. That is not where we should go; what’s the CBN rate? As at Friday, the rate for the dollar was about N1600.

“Even in the so-called parallel market, the exchange rate is stabilising there and that is what this needs. Our economy is too much dollarised. Importers are looking at the exchange rate and using it to fix prices, some of them arbitrarily, some of them actually profiteering,” Onanuga stated.

According to him, once the CBN succeeds in stabilising the exchange rate, the prices of goods in the country will normalise. “Things are not going to get worse, they are going to get better in the next few weeks,” he noted.

Nigeria’s Wobbling FX Market
Nigeria is battling rising inflation, food inflation, forex crisis, economic hardship and high cost of living occasioned by the removal of petrol subsidy, attracting protests in parts of the country.

The Nigerian naira has seen a dip in the last nine months since the President Bola Tinubu administration collapsed the foreign exchange window. The naira experienced an all-time low, falling from about N700/$1 last May to over N1500/$1 at the moment.

The authorities have since turned their focus to cryptocurrency websites, clamping down on them through telecommunication companies.

On Tuesday, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, said illicit flows in the form crypto exchanges passed through Binance.

“We are concerned that certain practices go on that indicate illicit flows going through a number of these entities [crypto platforms] and suspicious flows at best,” Cardoso told reporters at the Monetary Policy Committee (MPC) meeting of the apex bank, the first since he assumed office in September 2023.

“In the case of Binance, in the last one year alone, $26bn has passed through Binance Nigeria from sources and users who we cannot adequately identify,” he added.

The apex bank chief said anti-corruption agencies, the police and the Office of the National Security Adviser, Nuhu Ribadu, were co-ordinating an investigation into cryptocurrency exchanges.