Nigeria has solidified its position as a global leader in digital finance by becoming the second-largest adopter of crypto worldwide, according to an upcoming report by Chainalysis. This ranking showcases Nigeria’s rapidly expanding crypto ecosystem, where everyday transactions, remittances, and business payments are increasingly reliant on digital assets, particularly stablecoins. The country’s success reflects a broader trend in Sub-Saharan Africa, where there is modest yet significant growth in crypto adoption.
Chainalysis reports that Sub-Saharan Africa received $125 billion in on-chain value between July 2023 and June 2024, marking a $7.5 billion increase compared to the previous year. While the region’s contribution to the global crypto economy is relatively small at 2.7%, it is steadily growing as several African nations, including Ethiopia, Kenya, and South Africa, secure spots in the top 30 on the Chainalysis Global Adoption Index.
Moyo Sodipo, COO and co-founder of Nigerian crypto exchange Busha, highlighted how practical crypto has become for everyday transactions in Nigeria. Many Nigerians are turning to crypto for bill payments, mobile credit top-ups, and cross-border transfers as the traditional financial system grapples with inflation and currency devaluation.
Sub-Saharan Africa is also leading in DeFi adoption, offering financial services like lending and borrowing without traditional banks, which are often inaccessible to many. With only 49% of adults in the region having access to a bank account, crypto presents an attractive alternative for millions seeking financial services.
Stablecoins are playing a crucial role in Sub-Saharan Africa’s crypto economy, accounting for 43% of total crypto transactions in the region. In Nigeria, businesses and individuals are increasingly using stablecoins like USDT and USDC to safeguard their assets from the devaluation of the local fiat currency. These dollar-pegged digital currencies have gained traction in countries where local currencies are volatile and access to US dollars is limited.
Chris Maurice, CEO of African crypto exchange Yellow Card, emphasized the importance of stablecoins in facilitating international trade for businesses in Nigeria. Stablecoins serve as a reliable alternative in a country facing a foreign exchange shortage, enabling companies to conduct international transactions that would otherwise be hindered by currency shortages.
Ethiopia has seen a significant increase in stablecoin transfers following a 30% devaluation of the local currency, the birr, as the government relaxed currency restrictions in exchange for a loan from the IMF and World Bank. Stablecoins are revolutionizing cross-border payments across Africa, making remittances cheaper and faster compared to traditional fiat methods.
As Nigeria and other Sub-Saharan nations deepen their engagement with crypto, stablecoins are expected to play a central role in stabilizing economies, facilitating international trade, and enabling cross-border payments. South Africa, with its growing institutional activity and integration with traditional finance, is poised to drive further crypto adoption in the region.
Overall, Nigeria and South Africa are leading the way in demonstrating how crypto can drive financial inclusion in Sub-Saharan Africa. The region’s increasing adoption of crypto and stablecoins is reshaping the financial landscape, providing alternatives for individuals and businesses seeking financial services in a rapidly evolving digital economy.