The President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe, has expressed the commitment of BDC operators to defending the Naira against speculators.
Speaking to the News Agency of Nigeria in Abuja, Gwadabe emphasized the role of ABCON as a self-regulatory body in curbing the excesses of BDC operators. He highlighted the inauguration of state chapters to establish a data repository of forex market participants, facilitating compliance with the Financial Action Task Force (FATF) regulations.
Gwadabe emphasised the need for harmonization and centralization in the foreign exchange market, advocating for Know Your Customer (KYC) protocols to identify all market participants. He stressed the importance of enabling the Central Bank of Nigeria (CBN) to track all players in the market, not just BDCs, to effectively regulate their involvement.
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Additionally, he mentioned collaboration with regulatory authorities to verify BDC offices using technology.
Regarding recent currency depreciation, Gwadabe expressed concern among BDC operators. He pointed out the emergence of peer-to-peer (P2P) platforms, such as Binance, where speculators use dollars to purchase stablecoins like USDT.
He highlighted the profitability of any of these platforms as a factor contributing to Naira depreciation, despite efforts to regulate them.
Gwadabe underscored the awareness of the CBN and security agencies regarding the activities of such platforms. He characterized them as engaging in illegal economic behavior, lacking patriotism. He criticized the treatment of the dollar as a tradable commodity, leading to significant outflows of foreign currency from the system.
Highlighting the liquidity and transaction volume of platforms like Binance, Gwadabe expressed concern about their impact on the Naira’s stability. He noted that many users source funds from the open market to finance transactions, further exacerbating currency depreciation.
He called for concerted efforts to address the root causes of Naira depreciation and curb illegal economic behaviours in the foreign exchange market.
Gwadabe reiterated the commitment of BDC operators to collaborate with regulatory authorities to maintain the stability of the Naira. He emphasized the importance of addressing the challenges posed by P2P platforms and illegal economic behavior to safeguard Nigeria’s currency and financial system.