The Association of Bureaux De Change Operators of Nigeria (ABCON) has asked the Federal Government to utilize all available means to prevent Binance from operating in the nation.
ABCON President Aminu Gwadabe provided the suggestion in an interview with newsmen on Tuesday in Lagos.
Binance is an online exchange where users can trade cryptocurrencies. It accepts hundreds of the most popular coins.
Binance, he claims, is one of several reasons exerting pressure on the naira. The Securities and Exchange Commission (SEC) of Nigeria published a statement in June 2023, highlighting that Binance Nigeria was not registered or regulated by the SEC, making its operations in Nigeria unlawful.
“If you are familiar with 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,” Gwadabe added.
“As a result, we need to do something to put a stop to Binance.” We need to prohibit Binance, and the only way to do that is if you have liquidity.
“As of right now, Binance is the most liquid market, with 1.2 million transactions every second. So it’s a highly liquid market, but that’s not a bad thing; we can overcome it with our local content and uniqueness.”
In the current foreign currency market environment, the ABCON president observed that optimism was giving way to pessimism.
Gwadabe stated that when pessimism overpowers market psychology, individuals lose confidence, which is critical in every currency of every nation.
“As a result, we are witnessing a scenario in which optimism is giving way to pessimism; investors are not coming, Nigerians lack confidence in the market, and we must look for external finances that are coming in as a quick fix.”
“The naira is under a lot of pressure due to bank and oil company foreign exchange hoarding.”
“Is it Nigerians who want to pay school fees, round trips, speculation, and so on?” All of these combined to put pressure on the naira.
“The spike and volatility did not start now; it is something the current government inherited and has gone a long way in curbing illegal behaviour in the foreign exchange market, which is the goal of the unification,” he explained.
Gwadabe expressed hope that with the withdrawal of petrol subsidies, the Central Bank of Nigeria (CBN) will be able to see remittances from the Nigerian National Petroleum Corporation (NNPC), stating that before the subsidy, NNPC remittances to the CBN were nil.
This, he added, would also allow the central bank to have liquidity and inflows that would allow it to defend the naira.
He stated that if we have a welcoming, competitive, and transparent structure, more investors will want to enter the market.
“In order for us to succeed, we need liquidity. “Countries that use flexible exchange rates have large reserves and a strong balance of payments,” he added.
The ABCON president encouraged the National Assembly to pass measures that would safeguard market investors.
“So, now that the market is divided into tiers, we need legislation to ensure that everyone follows the law, understands his obligations, and is protected by the law.” “You’re good to go as long as you meet your obligations,” he stated.
After CBN revoked the licence of 2,698 BDCs, Gwadabe dismissed the claim, stating, “As far as I’m concerned, that list was not correct and is still not confirmed.”
“The CBN has yet to release a comprehensive list.” Yes, the CBN is examining the BDC registry with the goal of lowering the number, but there is no formal list that specifies who is licenced and who is not.
“So, the statuesque remains the same,” he explained. ”
The ABCON president stated that the organisation had interacted with CBN and had been urged to sensitize its members to the conditions governing their activities as well as their duties to give returns to CBN.
“We have a separate department in CBN that supervises us, and we need to update our records with them in terms of returns, change of address, change of directors, and other issues involving technicalities to render returns.”
“So, these are the things we have appealed to CBN about, and because of our low business and lack of activity, many of our members have closed shop, but this is not an excuse.”
“However, the CBN has listened to our difficulties and has given us several months to work on them and improve our returns,” he added.
The CBN cut the number of BDC dealers from 5,689 originally permitted in 2022 to 2,991 in July.
The ‘Approved BDCs’ document stated that the permits of 2,698 BDCs had been cancelled.
