Binance, a cryptocurrency exchange platform, has listed Nigeria’s Naira as the first fiat trading pair starting from today.
Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies and is considered as the biggest cryptocurrency exchange in the world in terms of trading volume since early 2018, according to Wikipedia.
With the latest development, Nigerian users will be able to buy Bitcoin, Binance Coin (BNB), and Binance’s stablecoin BUSD with Naira.
Top exchanges that provide fiat-to-crypto trading services mostly focus on the United States dollar, or at least on the euro or yen, as they are the most traded currencies.
Currently, the United States dollar enjoys the status of a global reserve currency.
Nevertheless, Binance went the other way by adding the national currency of an African country as its first fiat service, Tribune reported.
Last month, Bitcoin was the most popular particularly in Africa and especially in Nigeria.
The country leads the current ranking of top regions where the Google search trends of “Bitcoin” term note the highest frequency.
Nigeria is struggling with a humanitarian crisis on its north-eastern side, which affects the economy.
Citizens find it difficult to use their national currency as a store of value as Naira devalues from year to year.
The report, however, says that they can now use Binance to buy Bitcoin, BUSD or BNB in exchange for Naira.
Binance launched the new fiat solution in partnership with the payment system, Flutterwave.
Interestingly, USD/NGN rose almost 18% yesterday, hitting a new record high at 361. Previously, one US dollar bought about 306 Naira.
The pair had fluctuated between $300 and $330 for about three years. The last time when USD/NGN traded above $350 was in the summer of 2016, and it lasted a few days only.
The recent drop demonstrates once again that Naira is an unstable currency that doesn’t deserve people’s trust. Binance’s launch came on time.
The primary reason behind the yesterday crash is a sudden decline in Nigeria’s foreign reserves. Last week, the Central Bank of Nigeria said that the reserves depleted by $5 billion in about four months, to $40.79 billion, the lowest level year-to-date and the biggest drop in 2 years.
The central bank uses foreign reserves to stabilize the markets and the national currency.
As for Binance, CEO Changpeng Zhao hinted that more fiat currencies would show up on the platform, which has been among the top 3 most popular crypto-to-crypto exchanges.