Skip to content

SME Guide

Binance Implements Price Cap for Tether, Open to Working with Nigerian Authorities

Binance, a leading peer-to-peer cryptocurrency exchange, has introduced a price cap for the stablecoin Tether (USDT) on its platform. This move comes as the company expresses a willingness to collaborate with Nigerian regulatory bodies.

In a recent blog post, Binance clarified that its P2P marketplace functions as a market-driven platform, not as a price discovery mechanism for currencies in Nigeria. The exchange stated:

“Binance provides a P2P marketplace, not a price discovery platform. It is market-driven and is not intended to be a proxy for currency pricing in Nigeria.”

The exchange further explained that its system automatically pauses trading during periods of significant currency fluctuations to protect users and prevent potential abuse. Recently, Binance observed a temporary suppression of prices that exceeded its system limit. To address this, the exchange promptly made the necessary adjustments to allow trading to continue.

Binance emphasised its commitment to safeguarding users in the market through various measures, including real-time monitoring, the immediate removal of non-compliant advertisements, and the permanent exclusion of bad actors from using its P2P product. Additionally, the exchange employs continuous market surveillance to promptly remove abnormal prices, supported by a fixed security deposit.

Acknowledging the complex factors influencing foreign exchange rates, Binance stated that it does not influence these rates. However, the company remains dedicated to actively engaging with regulators, policymakers, and other stakeholders to foster an open and transparent dialogue about managing the evolving landscape of cryptocurrency and financial markets.

Binance reiterated its commitment to providing market-driven, fraud-free, and manipulation-free products for users, emphasising its responsibility to protect users and their confidential data.

Meanwhile, presidential aide Bayo Onanuga criticised Binance for allegedly setting exchange rates in Nigeria, suggesting that the exchange should not be allowed to dictate the value of the naira. Onanuga also advocated for banning other cryptocurrency platforms like Kucoin, Bybit, and Aboki from operating in Nigeria’s cyberspace.

The Central Bank of Nigeria (CBN) has intensified efforts to address forex speculation and its impact on the Nigerian currency. Recently, operatives from the Economic and Financial Crimes Commission (EFCC) raided bureau de change outlets in Abuja, arresting currency traders suspected of speculating against the naira.

As of Tuesday, the naira closed at 551.24 per US dollar on the official window.

Leave a Reply

Your email address will not be published. Required fields are marked *