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The recent announcement of Binance Holdings Ltd, the cryptocurrency giant, leaving the Nigerian market and discontinuing its services for the naira has raised concerns among experts and cryptocurrency enthusiasts.
While Binance plans to automatically convert naira balances to USDT, experts argue that this move could exacerbate youth unemployment in Nigeria.
Economist Shedrach Israel from Lotus Beta Analytics expressed his concerns, stating that banning Binance will not resolve the depreciation of the naira.
He compared it to “trying to cure malaria with paracetamol,” emphasizing that the issue is much larger than just the cryptocurrency exchange.
Israel called for the Central Bank of Nigeria (CBN) to investigate the forex holdings of top Nigerian politicians and enforce the conversion of their money to naira.
According to a report by the National Bureau of Statistics (NBS), the unemployment rate for youth aged 15-24 in Q2 2023 was 7.2%, a slight increase from the previous quarter.
Additionally, approximately 22 million individuals, accounting for 10.3% of Nigeria’s total population, currently possess digital currency.
While Binance’s departure may have both positive and negative consequences, cryptocurrency trader John Odiba believes that the positive outcomes will prevail in the future.
He acknowledges that decreased liquidity in the Nigerian cryptocurrency market may lead to higher transaction costs and limitations in accessing certain cryptocurrencies.
However, Odiba also sees an opportunity for local cryptocurrency exchanges to thrive, offering Nigerian users more tailored options like the eNaira.
For individuals like Godwin Ojonugwa, who relied on Binance for peer-to-peer transactions, the exit has raised concerns about potential unemployment.
Ojonugwa shared how Binance helped finance his education and build his first house, highlighting the impact this decision could have on his livelihood.
As Nigeria go through the challenges of foreign exchange difficulties, experts urge the government to explore more effective strategies to address the issue and prevent any negative consequences, such as increased youth unemployment.
This article was updated 2 months ago
