Binance, BuyCoins activate new deposit features amid CBN prohibition
Less than a week after cryptocurrency exchanges announced a suspension of deposits using Nigerian local currency, Binance and BuyCoins have now released features that allow their users to carry on their trading activities with little hitches.
Binance, a global cryptocurrency exchange with significant investment in the crypto market in the country, on Thursday, said it has added an NGN FIAT/NGN pair to its Peer-to-Peer (P2P) trading platform in Nigeria. The feature enables the user to buy and sell their NGN fiat balance on Binance with zero transaction fees for Nigerian Naira using bank transfer and other payment methods.
BuyCoins, a Nigerian-based cryptocurrency, also launched a new deposit and withdrawal method. The company is behind the NGNT, a stablecoin that will always have a value equal to the naira. According to the official NGNT website, Naira Token (NGNT) is an ERC 20 token that bridges the naira with the advantages of digital currency, giving cryptocurrency traders, business owners, and software developers the ability to transact with the Naira across the blockchain. An ERC 20 token is a blockchain-based asset with similar functionality to bitcoin, ether, and bitcoin cash: it can hold value and be sent and received.
In a blog post, BuyCoins showed a detailed process that terminates with the buyer paying money directly into the account of the seller.
“Once you are certain of both amounts, click on “Start Deposit” and then “Show Deposit Information.” Once you do this, you’ll see the bank details to pay to; this is the bank information of another BuyCoins user who has a withdrawal request that matches your deposit,” the post read.
The Central Bank of Nigeria (CBN) directed banks, non-banking institutions, and other financial institutions to close accounts of firms dealing in cryptocurrencies including exchanges. A situation that has seen the exchanges in the country suspend deposits in the local currency – naira. According to the apex bank, the opacity of cryptocurrencies makes them a favorite tool for cybercriminals, money launderers, and terrorist financiers.
However, experts say this measure would not affect transactions, especially for peer-to-peer providers. Gaius Chibueze, founder and CEO of Abit Network, a cryptocurrency trading platform that backs the coin Tatcoin, told BusinessDay that interests in bitcoin continue to rise in Nigeria despite the financial regulator’s stance. This also means a rise in the volume of transactions for peer-to-peer exchanges.
He explained how peer-to-peer trading using an exchange works. It is a process where a coin seller moves his coin to the platform; creates a buy order stating the quantity he is selling and the rate he is selling for and how he intends to receive payment externally. A buyer comes, sees his trade, and chats with him. The buyer proceeds to make payment in the seller’s external bank account as stated and uploads evidence of payment. The exchange debits and locks the coin. The seller confirms payment in his external account and clicks a button notifying the exchange that he has received money, hence the exchange should release the coin to the buyer.
“It’s the safest option for now because a crypto exchange will never release coin without seller’s confirmations and all exchanges have buttons for dispute resolution which most times leads to both parties printing bank statements,” Chibueze said.