The Association of Bureaux De Change Operators of Nigeria (ABCON) has urged the Federal Government to ban the operations of Binance, citing the exchange as a major factor contributing to pressure on the naira.
Binance is a global online exchange platform where users can trade cryptocurrencies regularly, supporting a wide range of commonly traded digital assets.
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Binance’s Dominance in Liquidity Generates Concerns
According to NAN, Alhaji Aminu Gwadebe, the President of ABCON, raised concerns about Binance’s increasing influence in the trading landscape. He noted that Binance has become the go-to platform for investors and exporters, dominating both the Investor and Exporters window and the parallel market.
With an impressive trading volume of 1.2 million transactions per second, Binance stands as the most liquid market. Gwadebe emphasized the need to challenge this dominance through local content and unique market characteristics.
Gwadebe expressed his worry regarding the prevailing pessimism in the foreign exchange market, highlighting that it erodes market confidence. He attributed the pressure on the naira to various factors such as currency hoarding by banks and oil companies, school fee payments, speculative activities, and round-tripping.
Gwadebe commended the current government’s efforts in combating illegal behavior in the foreign exchange market, emphasizing the objective of unification.
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CBN’s Expectation of Remittances from NNPC
Gwadebe expressed hope that the recent removal of petrol subsidies would enable the Central Bank of Nigeria (CBN) to receive remittances from the Nigerian National Petroleum Corporation (NNPC). He highlighted that when the subsidy was in place, the remittance to the CBN from NNPC was zero.
This change could provide the CBN with the necessary liquidity and inflows to defend the naira. Gwadebe emphasized the importance of creating a friendly, competitive, and transparent system to attract more investors to the market.
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Calls for Legislative Protection of Investors
The ABCON President urged the National Assembly to enact legislation that safeguards investors in the market. Strengthening investor protection measures can attract more participants and contribute to market stability.
Clarification on Revoked BDC Licenses
Gwadebe discredited reports of the Central Bank of Nigeria revoking licenses of 2,698 Bureaux De Change (BDC) operators, stating that the list provided was incorrect and unconfirmed.
He mentioned that the CBN has not released an official comprehensive list stating which licenses have been revoked or remain valid.
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BDC Operators Advocate for Increased Involvement in the Forex Market
Previously, BDC operators called for increased participation in the foreign exchange market to ensure the success of the new exchange rate policy implemented by the CBN.
They expressed dissatisfaction with the exclusion of BDCs from the Investors and Exporters window, as they play a crucial role in addressing the retail end of the market and maintaining exchange rate stability.
The debate surrounding Binance’s operations in Nigeria continues, as BDC operators appeal for a ban to alleviate pressure on the naira. The involvement of various stakeholders and the Legislative Assembly’s assessment of regulations and investor protection measures will be critical in shaping the future of the Nigerian forex market.
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