Experts and crypto enthusiasts have lamented the current ban on Binance naira operations in Nigeria, stating it may increase youth unemployment in the country.

The experts called on the government to look for better means of managing the country’s current foreign exchange challenges.

An economist with Lotus Beta Analytics, Shedrach Israel, said that the recent move by the government was tantamount to “treating malaria with paracetamol”.

He claimed the ban on Binance would not address the falling value of the naira.

“I don’t know why the cryptocurrency is being seen as sabotage on the exchange rate because the cryptocurrency is not the major means by which the dollar is flowing in Nigeria. Banning Binance is like giving a malaria patient paracetamol. Although paracetamol may cure the pain of malaria, it does not cure the sickness.

“Similarly, banning Binance has not stopped the naira from falling because the issue is bigger. Binance is just a bit of how much liquidity the dollar has in Nigeria,” he argued.

Israel has called on the CBN to investigate the forex holdings of top Nigerian politicians.

These people, whether politicians or private citizens, who have stored up forex should be made to convert their money to naira, otherwise, the ban would not be effective.

“Although the CBN governor claimed about $26bn had left Nigeria through Binance unaccounted, the fact is that Binance uses peer-to-peer trade, which means that there is inflow and outflow of naira in the economy. If $26bn has gone out, how much has come in? Binance is not our problem. Some Bureau de Change operators are possibly richer than Binance users,” he added.

According to the National Bureau of Statistics unemployment data, the unemployment rate among youth aged (15-24 years) in Q2 2023 was 7.2 per cent, compared to 6.9 per cent in Q1 2023.

It is estimated that over 22 million people, or 10.3 per cent of Nigeria’s total population, currently own digital currency.

In September 2023, the Securities and Exchange Commission of Nigeria issued a definitive statement, explicitly clarifying that Binance Nigeria was neither registered nor regulated by the SEC.

This official declaration categorises the operations of the renowned global cryptocurrency exchange, within Nigeria as illegal and unauthorised.

In December 2023, the apex bank changed its stance on crypto assets in the country and asked banks to disregard its earlier ban on crypto transactions.

A cryptocurrency trader, however, stated that the effect of Binance’s exit from Nigeria could be both negative and positive, with the positive outweighing the negative in the long run.

“The effect of Binance’s exit on Nigerian users can be both positive and negative. One of them is that it could lead to decreased liquidity in the Nigerian cryptocurrency market, resulting in higher transaction costs and less favourable trading conditions for users. Nigerian users may face some limitations in accessing certain cryptocurrencies and trading pairs that were previously available on Binance, potentially hindering their investment opportunities,” he said.

On the positive side, he said the absence of Binance could create space for local cryptocurrencies like the eNaira to thrive.

“The absence of Binance could create space for local cryptocurrency exchanges to thrive, offering Nigerian users more options tailored to their needs, in the long run,” he said.

According to a crypto enthusiast, his main source of income is the Binance peer-to-peer trade.

He claimed that he was able to fund his education and built himself a befitting apartment through the trade.

He lamented that the current restrictions had negatively impacted his business and he was scared of becoming unemployed.

Binance has made me a millionaire. I went to school and built my first house with Binance trade. Banning it has made business difficult and I am afraid of becoming unemployed,” he enunciated.