In response to regulatory scrutiny, the giant cryptocurrency exchange Binance has deactivated its peer-to-peer (P2P) market function on its mobile app for the Nigerian naira.

Peer-to-peer function, popularly known as P2P, allows users, buyers, and sellers to trade without third-party interference. The feature is responsible for catering to Nigerian users despite a widespread crypto ban in 2021. At the moment, Nigerian users can only trade the naira for cryptocurrency using Binance’s given rate using the Binance Express, a feature that lets you place an order directly just by entering the fiat amount you want to buy or sell.

Earlier this week, Nigerian crypto exchanges decided to halt the purchase of USDT and USDC stablecoins using Naira. This move was initiated by the Digital Currency Coalition, an autonomous group led by key officials from local exchanges such as Onboard, Quidax, Tradefada, and Patricia.

“By 7PM (WAT) today, we're suspending the buying and selling of USDT and USDC for Naira. This means you can't buy or sell USDT or USDC with Naira, or fund your Onboard USD Card with it.” an in-app memo from Onboard read.

The federal government believes that crypto trading platforms are contributing to the fall of the naira. Last week, it issued an order for telecommunication companies and other internet service providers in the West African nation to block access to cryptocurrency trading platforms such as Binance, Coinbase, and OctaFX.

“Binance, facing regulatory showdown in many countries, and causing disruptions in the currency market, should not be allowed to dictate the value of the naira, not on its crypto exchange platform,” presidential spokesperson Bayo Onanuga told Bloomberg. “Crypto should be banned in our country or else this bleeding of our currency will continue unabated.”

Following this order, Binance stated that it is “committed to adhering to applicable local regulations and laws, with a dedicated focus on maintaining active engagement with all relevant stakeholders, regulators, and policymakers.”

The decision to disable the P2P feature can be interpreted as an attempt to appease Nigerian regulators and solidify its position as the leading crypto exchange in the country. Additionally, the arrest of two of its executives may have also played a role in the delisting.

“Although, the delisting poses short-term challenges and should have been handled better honestly, but also opens a window for dialogue with regulators to build a stronger, compliant financial infrastructure. This can address concerns and pave the way for responsible on-chain solutions, “ a crypto exchange CEO anonymously told NODO.

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