Nicholas Anthony, a policy analyst at the Center for Monetary and Financial Alternatives of the Cato Institute, stated that "it should not be a surprise that Nigerian citizens have turned to cryptocurrencies" in light of the Nigerian government's provision of an "unreliable store of value." This statement was shared in his April 11 commentary titled "Nigeria’s Government Is Blaming Binance for Its Own Mismanagement," which was published on the Cato Institute's website.
"From this perspective, it should not be a surprise that Nigerian citizens have turned to cryptocurrencies — stablecoins, in particular — to get dollar exposure," said Anthony. "The Nigerian government supplied an unreliable store of value and the public turned to better options. By enacting restrictions to bar these alternatives, the Nigerian government is doubling down on its mistakes. It's failing to recognize that cryptocurrency use is a symptom, not a cause, of the naira's failure."
In his commentary, Anthony pointed out that "the naira has been falling for years," with tensions escalating in February following its most recent "crash." He further stated that the Nigerian government has implemented inconsistent price controls, leading many Nigerians to turn to cryptocurrencies as a means of gaining exposure to other currencies. The government responded by clamping down on the crypto industry and blaming Binance, a cryptocurrency exchange platform, for exacerbating Nigeria's economic situation. In an attempt to address this issue, Binance representatives Tigran Gambaryan and Nadeem Anjarwalla were invited by the government but were subsequently detained and placed under house arrest in Nigeria.
According to Voice of America, experts attribute Nigeria's economic crisis to the Central Bank of Nigeria's excessive printing of currency. It is estimated that around 13 million Nigerians currently hold cryptocurrency - the highest number in any African nation.
Data from The Conversation indicates that inflation rates in Nigeria increased from 28.92% in December to 29.90% in January - a peak not seen in two decades. Between June 2023 and mid-February 2024, the value of the naira declined by 69%. This devaluation has resulted in skyrocketing costs for basic necessities among Nigerian residents, with little hope for economic improvement without fiscal discipline from the government.
On April 4th, Binance issued a statement requesting that Tigran Gambaryan, who holds no decision-making power within the company, should not be held accountable during ongoing discussions between Binance and Nigerian government officials. The statement, which described Gambaryan as a "strict law enforcement professional," noted that his team has responded to over 600 information requests from Nigerian law enforcement since he joined the company in 2021.
The Cato Institute website states that Anthony's research primarily focuses on monetary and financial economics. He is recognized as an expert in areas such as cryptocurrencies, central bank digital currency, and financial privacy. In addition to his role at the Cato Institute, he is also a fellow at the Human Rights Foundation.