Nigeria has become the second largest crypto adopter in the world, cementing its position as a leader in digital finance, according to the upcoming Chainalysis report.
The ranking illustrates Nigeria’s rapidly expanding crypto ecosystem, where daily transactions, remittances and business payments increasingly rely on digital assets, particularly stablecoins. The country’s success reflects a broader trend in sub-Saharan Africa, a region that is seeing modest but significant growth in crypto adoption.
According to Chainalysis, Sub-Saharan Africa’s booming crypto economy, driven by the need for alternative financial services and more accessible international markets, is positioning the region as a growing hub for innovation and financial inclusion across the world. world stage.
Steady growth in sub-Saharan Africa
Despite accounting for just 2.7% of global transaction volume, Sub-Saharan Africa received $125 billion in on-chain value between July 2023 and June 2024, an increase of $7.5 billion from to the previous year.
Although the region’s contribution to the global crypto economy remains small, its influence is growing as several African countries emerge as key players in the crypto space. Other African countries, including Ethiopia, Kenya and South Africa, all achieved a place in the top 30 of the Chainalysis Global Adoption Index.
Moyo Sodipo, COO and co-founder of Nigerian crypto exchange Busha, said:
“The high adoption rates in Nigeria show how practical crypto has become for everyday transactions.”
Sodipo noted that many Nigerians are turning to crypto for bill payments, mobile credit top-ups and cross-border transfers as the traditional financial system struggles with inflation and currency devaluation.
The report also highlighted sub-Saharan Africa’s leadership in DeFi adoption. DeFi platforms allow users to access financial services, such as lending and borrowing, without resorting to traditional banks, which remain out of reach for many.
The World Bank estimates that only 49% of adults in the region had access to a bank account in 2021, making crypto an attractive alternative for millions.
Stablecoins ensure economic stability
Stablecoins play a central role in Sub-Saharan Africa’s crypto economy, with Chainalysis estimating that they account for 43% of the region’s total crypto transactions. These dollar-pegged digital currencies have gained popularity in countries where local currencies are volatile and access to the US dollar is limited.
In Nigeria, businesses and individuals are increasingly relying on stablecoins like USDT and USDC to protect their assets from the current devaluation of the local fiat currency. The country’s foreign exchange shortage has further intensified demand for stablecoins, allowing businesses to conduct international trade that would otherwise be hampered by a currency shortage.
Chris Maurice, CEO of African crypto exchange Yellow Card, said:
“The banks don’t have money, the government doesn’t have money, and even if they did, they wouldn’t give it to you.”
He explained that stablecoins provide a reliable alternative for businesses involved in international trade, from small importers to large multinational corporations.
Ethiopia, the region’s fastest growing market for stablecoin usage, saw a 180% year-over-year increase in retail stablecoin transfers. The rise follows a 30% devaluation of Ethiopia’s local currency, the birr, as the government eased currency restrictions in exchange for a $10.7 billion loan from the IMF and World Bank.
Stablecoins are also revolutionizing cross-border payments across Africa. Remittances, a vital source of income for many African households, have become significantly cheaper and faster thanks to stablecoins compared to traditional fiat currency methods.
In Nigeria alone, stable transactions below $1 million have almost reached $3 billion by early 2024, demonstrating their growing importance for small and medium-sized transfers.
Crypto and financial inclusion
As Nigeria and other sub-Saharan countries deepen their engagement in crypto, stablecoins are expected to play a central role in stabilizing economies, facilitating international trade and enabling cross-border payments.
South Africa, with its rapidly growing institutional activity and TradFi integration, is poised to become another key driver of crypto adoption in the region.
Rob Downes, head of digital assets at Absa Bank in South Africa, said:
“Nigeria and South Africa are leading the way in showing how crypto can drive financial inclusion.”
