Economy
The Nigerian Government’s Crypto Crackdown and the Role of USDT
In the last couple of weeks, Nigeria has found itself at the centre of a currency crisis, with the value of the Naira drastically falling against the US Dollar.
Amidst this economic turmoil, recall that at the beginning of the year, the value of the Naira to Dollar was between N900 and N1,100 to $1, however, the Naira now goes for N1,600 to $1. This issue has raised a lot of concerns for the Nigerian government.
In a bid to safeguard the Naira and tidy up the multiple systems of various exchange rates, the government has restricted access to some of the largest exchanges in the region and pointed fingers at cryptocurrency and the popular digital US Dollar (Tether USDT) stablecoin as culprits for exacerbating the situation. These accusations have led to a series of restrictive measures aimed at curbing access to cryptocurrencies and digital asset exchanges.
USDT Dragged into the Fray
The blame game surrounding the depreciation of the Naira has roped in USDT, a stablecoin pegged to the value of the US Dollar. Nigerian authorities allege that the increasing conversion of Naira to USDT, particularly as a hedge against inflation, is contributing to the currency’s devaluation. This narrative has unknowingly sparked scepticism and scrutiny around USDT’s role in the Nigerian economic landscape.
Tether is a cryptocurrency stablecoin, launched by the company Tether Limited Inc. in 2014 with a current market cap of $97.81B USD. While USDT’s involvement in Nigeria’s currency crisis has come under scrutiny, it’s essential to understand the various legitimate use cases of this stablecoin which include:
Various Use Cases of USDT
Hedging Against Inflation: In economies experiencing high inflation rates, such as Nigeria, USDT provides a stable alternative to volatile local currencies. Investors often convert their assets into USDT to shield themselves from the adverse effects of inflation.
Remittances and Cross-Border Payments: USDT facilitates seamless and cost-effective cross-border transactions. Nigerian expatriates and businesses can use USDT to send and receive funds internationally without being subjected to exorbitant fees or lengthy processing times associated with traditional banking systems. Likewise students schooling abroad, USDT serves as a fast safe and effective way to preserve the value of their fees and allowances.
Trading and Investment: USDT serves as a bridge between fiat and cryptocurrencies in the global digital asset markets. Traders and investors utilize USDT as a safe haven during periods of market volatility, allowing them to swiftly enter and exit positions without exposure to fiat currency risks.
Access to Decentralized Finance (DeFi): USDT plays a pivotal role in the burgeoning decentralized finance ecosystem, enabling users to participate in various DeFi protocols such as lending, borrowing, and yield farming. This accessibility empowers individuals to engage in financial activities traditionally reserved for institutional players.
Conclusion
The Nigerian government’s crackdown on cryptocurrency exchanges and the restriction of access to USDT reflect a broader global debate surrounding the regulation and adoption of digital assets. While concerns over currency speculation and financial stability are valid, it’s important to acknowledge the legitimate use cases of stablecoins like USDT in facilitating financial inclusion and innovation.
As the landscape of finance continues to evolve, policymakers must strike a balance between regulatory oversight and fostering technological advancement for the benefit of all stakeholders.
By Aduragbemi Omiyale
Those who purchased the N40 billion bond issued by Geregu Power Plc in 2022 but did not receive payments last month as expected have reportedly now been paid by the energy company.
Geregu Power, listed on the Nigerian Exchange (NGX) Limited, was in the news recently over the repayment default on July 28, 2026, triggering panic in the capital market.
Last week, the organisation admitted the issues caused by this default, but said, “Discussions and engagements are ongoing, and the company will continue to act in good faith in fulfilling its responsibilities.”
It further disclosed that “relevant stakeholders and advisers [are being actively engaged] regarding the resolution of the various challenges and is committed to achieving an orderly and mutually beneficial outcome.”
The latest information indicated that N6.03 billion owed investors under the firm’s N40.09 billion Series 1 Senior Unsecured Bond has been cleared.
This is expected to bring relief to investors, who may have feared the worst after the entity failed to meet its debt obligations when due.
However, on the FMDQ Securities Exchange, the status of the debt instrument remains as “credit default in the 8th coupon payment and 4th bullet principal repayment.”
As of the time of filing this report, Geregu Power has yet to confirm the clearing of the N6 billion debt.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited extended its losing streak to seven consecutive sessions on Wednesday after it closed lower by 0.36 per cent.
The loss suffered yesterday was inflicted by the energy space, which significantly shed 4.63 per cent at the close of business. This was because of profit-taking in Aradel Holdings.
Further, the insurance segment went down by 0.88 per cent due to sell-offs, especially after news of the revocation of the operating licence of Universal Insurance Plc by the National Insurance Commission (NAICOM) after it missed the new recapitalisation requirements.
The consumer goods index depreciated at midweek by 0.31 per cent, while the banking space recovered 0.54 per cent, with the industrial goods segment closing flat.
When market activities ended for the session, the All-Share Index (ASI) was down by 860.76 points to 240,750.47 points from 241,611.23 points, and the market capitalisation gave up N556 billion to settle at N155.417 trillion compared with the previous day’s N155.973 trillion.
International Energy Insurance shed 10.00 per cent to quote at N4.77, Aradel lost 9.99 per cent to trade at N1,374.20, Universal Insurance slumped by 9.41 per cent to 77 Kobo, Red Star Express depreciated by 9.26 per cent to N14.70, and Royal Express crashed by 8.62 per cent to N1.06.
On the flip side, Haldane McCall gained 10.00 per cent to end at N3.52, Coronation Insurance improved by 8.44 per cent to N2.44, UAC Nigeria jumped by 6.56 per cent to N177.85, AVA Capital grew by 6.29 per cent to N7.60, and Caverton rose by 5.32 per cent to N4.95.
The most active equity during the session was Fortis Global Insurance, with a turnover of 610.7 million units worth N1.2 billion. FCMB traded 60.9 million units worth N722.9 million, Fidelity Bank transacted 57.0 million units valued at N1.2 billion, Consolidated Hallmark sold 46.3 million units worth N312.7 million, and Royal Exchange exchanged 43.5 million units valued at N45.8 million.
In all, a total of 1.2 billion shares valued at N37.8 billion exchanged hands in 34,546 deals on Wednesday compared with the 429.8 million shares worth N27.5 billion traded in 35,683 deals on Tuesday. This indicated a spike in the trading volume and value by 179.20 per cent and 37.46 per cent, respectively, while the number of deals declined by 3.19 per cent.
By Aduragbemi Omiyale
The operating licence of Universal Insurance Plc has been withdrawn by the National Insurance Commission (NAICOM).
This action was taken by the regulator over the failure of the underwriting firm, which is listed on the Nigerian Exchange (NGX) Limited, to meet the new recapitalisation requirements on or before July 31, 2026.
NAICOM said it revoked the company’s licence based on its powers stipulated in the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
The regulator has appointed a Receiver/Provisional Liquidator for the insurance company, and he is Mr Ogbonna Chukwumerije, a partner at Pinheiro LP.
He will immediately trace, recover, secure and take possession of Universal Insurance’s assets, collate its liabilities and facilitate their settlement in accordance with the provisions of NIIRA 2025.
He is also required to liaise with NAICOM and submit periodic reports on the progress of the receivership and liquidation process.
Already, Mr Chukwumerije has informed banks, financial institutions, policyholders, creditors, debtors, customers and members of the public that Universal Insurance had entered receivership, advising parties dealing with the company’s funds, assets, records, policies, claims and liabilities to verify the authority of anyone claiming to act on its behalf.
Banks and other financial institutions were specifically warned against honouring withdrawals, transfers, payment mandates or other instructions issued on behalf of Universal Insurance unless authorised by the receiver.
However, Universal Insurance has taken steps to appeal NAICOM’s decision. The organisation was among six insurers that failed to meet the recapitalisation deadline.
