Binance Implements Price Cap on Tether on Nigerian P2P Platform

The cryptocurrency exchange reassured its Nigerian customers of its dedication to collaborating with local authorities, lawmakers, and regulators.

Binance limits USDT price in Nigeria to comply with local regulations.

Binance, the popular crypto exchange, has recently set a limit on the selling price of Tether (USDT) tokens on its peer-to-peer (P2P) platform in Nigeria. This decision was made to ensure compliance with local authorities and regulations. As a result, traders on Binance are currently unable to sell USDT above a cap of 1,802 naira per USDT.

Working Hand in Hand

Binance has expressed its commitment to working closely with local authorities, lawmakers, and regulators to address user noncompliance with the price cap. The exchange’s P2P platform allows users to buy and sell cryptocurrencies directly with other users using fiat currency.

However, the imposed price cap has led some traders to seek alternatives on other exchanges where they can trade USDT freely without restrictions. This has created a shift in trading volume to these platforms.

Addressing Economic Stability

This move by Binance is in response to a joint effort initiated by Nigeria’s Office of the National Security Adviser and the Central Bank of Nigeria (CBN) to combat forex speculation and address issues affecting the country’s economic stability.

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Speculators, both domestic and international, have been identified as significant actors contributing to the depreciation of the naira, exacerbating inflation, and causing economic instability in Nigeria.

Nigeria’s Forex Struggles

The unification of forex windows by the Nigerian government in mid-2023 resulted in a significant fall of the naira against the United States dollar. The exchange rate market saw the value of the naira double from about 700 naira/$1 to a historic high of over 1,500 naira/$1.

In July 2023, the Nigerian Securities and Exchange Commission (SEC) issued a warning to local investors against using Binance. The agency stated that the platform had no license to operate in Nigeria and deemed its operations illegal. The public was also reminded about the high risks and potential losses associated with investing.

Nigeria’s P2P Market

Despite the warning from the SEC, Nigeria remains the largest P2P market in the world. This status was achieved after the Central Bank of Nigeria banned institutions from buying and selling crypto in 2021. However, a circular issued in December 2023 lifted the crypto ban on Nigerian banks, thereby facilitating cryptocurrency transactions.

Many Nigerians facing difficulty with traditional banking and Bureau de Change channels for foreign exchange transactions find P2P transfers more attractive due to significantly lower fees in the crypto market.

Q&A: Addressing Additional Concerns

Q: Why did Binance implement the price cap on Tether in Nigeria?

A: Binance implemented the price cap on Tether in Nigeria to ensure compliance with local authorities and regulations, and to support efforts combating forex speculation and promoting economic stability in the country.

Q: Will the price cap affect trading volume on Binance’s P2P platform in Nigeria?

A: The price cap has led some traders to seek alternative platforms where they can trade USDT freely. As a result, there has been a shift in trading volume to these platforms.

Q: Is Binance working with local authorities and regulators to address user noncompliance with the price cap?

A: Yes, Binance has expressed its commitment to working closely with local authorities, lawmakers, and regulators to tackle user noncompliance and ensure adherence to the price cap.

Future Outlook and Recommendations

The implementation of the price cap on Tether by Binance in Nigeria showcases the importance of complying with local regulations and working together with authorities to address economic stability concerns. As Nigeria’s forex struggles continue, it is crucial for investors and traders to stay informed about regulatory developments and adapt their strategies accordingly.

Reference Links: – USDC Stablecoin Momentarily Depegs 0.74% on Binance – Craig Wright Told UK Court to Stop Making Irrelevant Allegations as COPA Trial Continues – Binance Futures to Roll Out BRC20 Token ORDI Perpetual Contracts for USDⓂ️ Margined Trades – Nigeria Urged to Regulate Cryptocurrency to Tackle Financial Crimes – Foreign Crypto Exchanges in India Face Uncertain Future – Asia Express: HK Game Firm to Buy $100M Crypto for Treasury, China/UAE CBDC Deal

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