ABCON Blames Binance for FX Demand Pressure on Naira

By Adedapo Adesanya

The Association of Bureaux De Change Operators of Nigeria (ABCON) has urged the federal government to ban the operations of Binance exchange in the country in order to save the widening exchange rate in the country.

Mr Aminu Gwadabe, ABCON president, stated this in an interview on Tuesday in Lagos, according to the News Agency of Nigeria (NAN).

Binance is an online exchange where users can trade cryptocurrencies. It supports hundreds of the most commonly traded cryptocurrencies and allows customers to trade these against foreign currencies in what is regarded as Peer-to-Peer (P2P) trading.

According to him, Binance is one of many factors putting pressure on the Naira.

Business Post reports that there is a N150 premium between the official rate at the P2P trading on Binance and at the official market.

The Securities and Exchange Commission (SEC) of Nigeria had in June issued a statement emphasising that Binance Nigeria was not registered or regulated by SEC, making its operations illegal.

Mr Gwadabe said, “If you know about Binance, you will know that Binance trading is becoming the anchorage of both the investors and exporters window and the parallel market, which is unfortunate. So, we have to do something that can stop Binance. It’s a competition. We need to ban Binance, and the only way to do so is if you have liquidity.”

He stressed, “As I speak, Binance is the most liquid market. They do 1.2 million transactions per second. So, it’s a very liquid market, but that is not a scary status; we can break it through our local content and peculiarities.”

The ABCON president noted that optimism was giving way to pessimism in Nigeria’s foreign exchange market.

Mr Gwadabe pointed out that when pessimism overrode the psychology of the market, it would lead to a loss of confidence.

“So, we are seeing a scenario where optimism is giving way to pessimism. Investors are not coming. Nigerians don’t have confidence in the market, and we have to look for external finances that are coming in as a quick fix,” he suggested.