- Nigeria ordered telecoms companies to block access to major cryptocurrency trading platforms like Binance and Coinbase that are popular in the country.
- Many young Nigerians have embraced crypto as an alternative to the weakening local currency and to make payments, transfer money, and store value.
- Advocates criticize the move as heavy-handed, arguing blockchain and crypto can drive financial inclusion. They say regulators worldwide face a dilemma balancing prudent regulation with room for innovation.
Nigeria Issues Directive to Block Crypto Sites
Nigeria ordered telecommunications companies and other internet service providers in the country to block access to cryptocurrency trading platforms. This affects websites including Binance, Coinbase and Kraken, which are widely used in Nigeria.
Many Nigerians use crypto as a hedge against frequent devaluation of the local currency, the naira.
Crypto Trading Platforms Targeted
The presidential directive aims to restrict access to the websites operated by major cryptocurrency exchanges which are popular among Nigeria’s tech-savvy young population. These platforms have enabled trading of digital coins like Bitcoin, Ethereum and others.
Young Population Adopts Crypto
With a median age of 18, Nigeria has a huge youth population. Many young Nigerians have embraced cryptocurrencies to make payments, transfer money and as a store of value. The crypto trading platforms blocked offer easier access to digital assets.
Central Bank Takes Tough Stance
Nigeria’s central bank has been critical of cryptocurrencies. In 2021, it banned banks from enabling crypto trading. However, Nigerians continued trading on peer-to-peer platforms. The fresh directive to telecoms providers seems aimed at restricting access further.
Crypto Advocates Criticize Move
Advocates of cryptocurrencies argue that blockchain technology and digital assets can drive financial inclusion. They say Nigeria’s directive denies people alternatives to the weakening naira.
Critics see the clampdown as heavy-handed and an infringement on the economic freedom of Nigerians looking to hedge against currency devaluation risks.
Regulation vs Innovation Dilemma
The Nigerian government’s directive highlights the dilemma faced by regulators worldwide. They have to balance prudent regulation with room for innovation in fast-evolving spaces like crypto. Outright bans could encourage illegal crypto trading.
Nigeria’s young, tech-savvy population will likely find ways around restrictions to access crypto trading platforms through VPNs and other means. Regulators have to keep this in mind when framing policies.
