Binance Nigeria Processed $26 Billion in One Year: CBN Governor Addresses Regulatory Measures

In a recent revelation, the Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, disclosed that Binance Nigeria facilitated transactions totaling $26 billion in the last one year. However, concerns about unidentified sources and potential illicit financial activities prompted the CBN to impose restrictions on crypto exchanges, including Binance.

During a press briefing following the 293rd Meeting of the Monetary Policy Committee, Governor Cardoso emphasised the need for a robust regulatory environment to curb illegal financial activities conducted through crypto platforms. The CBN’s recent actions included directing the Nigerian Communications Commission to suspend access to crypto websites like Binance, Coinbase, and Kraken.

The CBN’s regulatory stance gained support from Bayo Onanuga, Special Adviser on Information and Strategy to President Bola Tinubu. Onanuga advocated for restrictions on various crypto platforms, citing potential disruptions in the currency market and emphasising the importance of protecting the value of the naira.

Binance, a global crypto exchange, has faced regulatory challenges in multiple countries. In November, the platform encountered a $4.3 billion penalty in the United States for admitting guilt to criminal charges related to money laundering and sanctions violations. The recent scrutiny from Nigerian authorities adds another layer to the regulatory tensions surrounding Binance.

Governor Cardoso clarified that the CBN had collaborated with other agencies, including the Securities Exchange Commission (SEC), the police, and the anti-graft commission. The objective is to address concerns about the crypto market and ensure regulatory control. This move follows the SEC’s previous declaration of Binance as an illegal entity in June 2023.

Despite regulatory frictions, Binance has a history of engagement with the Nigerian government. In 2023, the Nigeria Export Processing Zones Authority expressed interest in partnering with Binance to establish West Africa’s first virtual free zone. The ongoing regulatory developments underscore the evolving landscape of crypto operations within the country.

CBN Implements Aggressive Monetary Policy: Interest Rates Raised to 22.75%

In addition to the crypto-related measures, Governor Cardoso announced a significant increase in the Monetary Policy Rate (MPR) by 400 basis points, reaching 22.75%. The decision aims to address the country’s soaring inflation rate, which stands at 29.90%. Previous policy rate hikes demonstrated some effectiveness in curbing inflationary pressure, but the CBN acknowledges the need for more impactful measures to anchor inflation in the near and medium term. These developments highlight the multifaceted approach taken by the CBN to navigate economic challenges and maintain regulatory control.