In a bid to stabilize its faltering currency, Nigerian authorities have taken an unprecedented step by blocking access to some of the world’s largest cryptocurrency exchanges, including Binance, Coinbase, and Kraken.
The move, ordered by the Nigerian Communications Commission (NCC) late on Wednesday, came as the government grapples with a spiraling currency crisis that has seen the naira plummet to record lows against the U.S. dollar.
According to people familiar with the matter, the NCC instructed telecoms companies to restrict consumer access to the websites of major crypto exchanges. On Thursday, many Nigerian users reported intermittent or no access to these platforms.
The crackdown marks a stark reversal of Nigeria’s previous stance on cryptocurrencies, which President Bola Tinubu’s government had initially embraced as part of its market-friendly reforms aimed at attracting overseas investment. The government had even lifted a previous ban on crypto transactions and sought to regulate digital assets.
However, as the naira continues its freefall, hitting an unprecedented 1,600 to the dollar on Wednesday, authorities have accused crypto exchanges of exacerbating the currency’s slide by serving as conduits for unofficial market rates and currency speculation.
“Crypto should be banned in our country or else this bleeding of our currency will continue unabated,” warned Bayo Onanuga, a special adviser to President Tinubu, accusing Binance of “blatantly” setting the exchange rate and undermining the Central Bank of Nigeria’s role.
A Binance spokesperson acknowledged that some Nigerian users were experiencing access issues but assured that users’ funds remained secure. The NCC, Coinbase, and Kraken did not respond to requests for comment.
Nigeria was second only to India last year in the proportion of private wealth stored in cryptocurrency, according to data provider Chainalysis. The rise of digital assets has been fueled by Nigerians seeking a reliable store of value amid the naira’s instability and eroding trust in the traditional financial system.
However, analysts note that crypto adoption is largely confined to tech-savvy youth, with the majority of Nigerians still relying on the naira for daily transactions.
The government’s crackdown on crypto exchanges is the latest in a series of unorthodox measures taken to defend the naira’s value. In 2021, the AbokiFX price-setting website was shut down for alleged “illegal activities,” while parallel market traders were targeted by authorities in 2015 through tree-cutting operations in the capital, Abuja.
As Nigeria grapples with its currency crisis, the blocking of crypto exchanges has raised concerns about the government’s approach to regulating the digital asset space and addressing the underlying economic issues driving the naira’s depreciation.