Associate Professor Rejects Alleged Link Between Nigerian Currency Depreciation and Crypto Trading

Nigeria’s decision to halt naira trading on cryptocurrency exchanges is likely to worsen matters for its volatile currency,” an associate professor at the University of East London has argued. The associate professor said Nigeria can effectively regulate the cryptocurrency industry through a framework introduced by its securities regulator in 2022.

Crypto Trading Not Linked to Naira Depreciation

An associate professor at the University of East London, Iwa Salami, has stated that Nigeria’s attempt to halt naira trading on cryptocurrency exchanges will likely exacerbate issues for the local currency. Salami also refutes the official Nigerian narrative that global cryptocurrency platforms contributed to the naira’s depreciation.

In her recently published opinion piece, the associate professor argues that while crypto has been associated with money laundering and drug trade, it has never been directly linked to the devaluation of national currencies, as alleged by the Nigerian government. Instead of completely banning crypto trading, Nigerian authorities should consider a more balanced regulatory approach, according to Salami.

“Nigeria needs a balanced approach to regulation if the industry is to thrive without harming financial and monetary stability. A stable financial system is capable of allocating resources efficiently and managing financial risks. The approach must protect consumers and investors,” Salami argued.

Associate Professor Favors Regulation Over Ostracizing Cryptocurrency Exchanges

As widely reported by several publications, including Bitcoin.com News, Nigeria has cracked down on cryptocurrency trading platforms. Authorities blame these platforms for the naira’s rapid depreciation earlier in the year. The West African nation specifically singled out Binance and has since filed several charges, including tax evasion allegations, against the crypto exchange giant.

However, in her opinion piece, Salami argues that Nigerian authorities can still achieve their objectives by regulating rather than ostracizing cryptocurrency exchanges. Using a regulatory framework established by the Nigerian Securities and Exchange Commission in 2022, authorities can request that exchanges disclose the identities of crypto wallet holders linked to suspicious activities, she said.

The associate professor suggests that if all global regulators were to adopt international standards for crypto asset activities, such as the Financial Stability Board’s recommendations, the concerns raised by Nigerian authorities could be easily resolved.

What are your thoughts on Iwa Salami’s recommendations to Nigerian authorities? Share your views in the comments section below. #Write2Earn