Crypto traders warn that Binance’s withdrawal could exacerbate unemployment among young people.

Specialists and digital currency aficionados have expressed concern over the prohibition of Binance naira transactions in Nigeria, warning that it might exacerbate the issue of unemployment among the youth.

During conversations with The PUNCH, these specialists urged the authorities to seek more effective strategies to handle the nation’s existing foreign exchange predicaments.

Shedrach Israel, an economist at Lotus Beta Analytics, criticized the government’s action likening it to “using a stopgap to cure a serious ailment.”

He posited that the prohibition of Binance would likely fail to solve the depreciating value of the naira.

“The view of cryptocurrency as undermining the exchange rate seems misguided as it’s not the predominant channel for dollar influx in Nigeria. Barring Binance is akin to treating a complex illness with a simple analgesic. While it may temporarily ease discomfort, it does not heal the underlying disease,” he contended.

Israel has called for the Central Bank of Nigeria (CBN) to conduct an assessment of foreign exchange possessions held by leading Nigerian political figures.

“These individuals, whether in political or private sectors, who have amassed forex, should be compelled to exchange their holdings for naira, or else the prohibition will remain ineffective.”

“Although the CBN governor cited an untraced $26 billion exiting through Binance, it’s vital to remember that Binance facilitates peer-to-peer trading, ensuring a continuous naira flow in the market. If $26 billion has exited, how much has entered? Binance isn’t our concern. It’s plausible that some currency exchange operators hold more wealth than Binance traders,” he further explained.

Data from the National Bureau of Statistics indicates a youth unemployment rate of 7.2% for those aged 15-24 in Q2 2023, up from 6.9% in Q1 2023.

Current estimates suggest that more than 22 million Nigerians, or 10.3% of the country’s population, are in possession of digital currencies.

In September 2023, the Securities and Exchange Commission of Nigeria clarified that Binance Nigeria is not registered or overseen by them, labeling the platform’s operations in Nigeria as illegal and without authorization.

Then, in December of the same year, the apex bank revised its position on cryptocurrencies and instructed banks to ignore its previous directive banning crypto transactions.

John Odiba, a cryptocurrency trader, believes that Binance’s withdrawal from Nigeria might have both negative and positive repercussions, with the benefits ultimately prevailing.

“Binance’s departure could see a reduction in market liquidity affecting Nigerian users with increased transaction costs and deterioration in trading conditions. Certain cryptocurrencies and trading pairs previously available on Binance may become inaccessible, limiting investment channels,” he explained.

He opined that, positively, Binance’s absence might pave the way for indigenous cryptocurrency platforms, like the eNaira, to flourish, bringing more customized solutions to Nigerian users over time.

Crypto enthusiast Godwin Ojonugwa made a point of how Binance’s peer-to-peer trading served as his main income source.

He spoke about funding his education and building his own home with the profits, indicating that the current constraints have adversely affected his livelihood and raised fears of unemployment.

“Thanks to Binance, I’ve become financially successful. It financed my education and home construction. With the ban rendering business arduous, the threat of unemployment looms,” he articulated.