Nigeria has become the second largest user of crypto in the world, cementing its position as a leader in digital finance, according to Chainalysis’s upcoming release. report.
The ranking illustrates Nigeria’s rapidly growing crypto ecosystem, where daily transactions, remittances and business payments increasingly rely on digital assets, especially stablecoins. The country’s success reflects a broader trend in Sub-Saharan Africa, a region witnessing modest but significant growth in cryptocurrency adoption.
According to Chainalysis, Sub-Saharan Africa’s fast-growing 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 on the global stage.
Steady growth in Sub-Saharan Africa
Despite representing only 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 compared to the previous year.
While the region’s contribution to the global crypto economy remains small, its influence is growing as several African countries emerge as major players in the crypto space. Other African countries, including Ethiopia, Kenya and South Africa, have all secured 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 rate in Nigeria shows 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 give users access to financial services, such as lending and borrowing, without the need for 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 of people.
Stablecoins provide economic stability
Stablecoins are crucial to Sub-Saharan Africa’s crypto economy, with Chainalysis estimating that they account for 43% of total crypto transactions in the region. These dollar-pegged digital currencies have gained significant popularity in countries where local currencies are volatile and access to US dollars is limited.
In Nigeria, businesses and individuals are increasingly relying on stablecoins such as USDT and USDC to protect their assets against the ongoing devaluation of the local fiat currency. The country’s foreign currency shortage has further intensified demand for stablecoins, allowing companies to conduct international trade that would otherwise be hampered by currency shortages.
Chris Maurice, CEO of African crypto exchange Yellow Card, said:
“The banks don’t have dollars, the government doesn’t have dollars, and even if they did, they wouldn’t give them to you.”
He explained that stablecoins can be a reliable alternative for companies involved in international trade, from small-scale importers to large multinationals.
Ethiopia, the fastest growing market for stablecoin usage in the region, has seen a 180% year-over-year increase in retail stablecoin transfers. The increase follows a 30% devaluation of Ethiopia’s local currency, the birr, when the government eased currency restrictions in return for a $10.7 billion loan from the IMF and World Bank.
Stablecoins are also revolutionizing cross-border payments across Africa. Remittances, an essential source of income for many African households, have become significantly cheaper and faster using stablecoins compared to traditional fiat currency methods.
In Nigeria alone, stablecoin transactions under $1 million reached nearly $3 billion by early 2024, demonstrating its growing importance for small and medium-sized transfers.
Crypto and financial inclusion
As Nigeria and other sub-Saharan countries deepen their involvement 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 major driver of cryptocurrency 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.”