Nigeria Emerges as the Second-Largest Adopter of Crypto Worldwide, Chainalysis Report Shows

Nigeria has emerged as the second-largest adopter of crypto worldwide, cementing its position as a leader in digital finance, according to Chainalysis' upcoming report.

Nigeria has emerged as the second-largest adopter of crypto worldwide, a ranking that reflects the country’s rapidly expanding crypto ecosystem, where everyday transactions, remittances, and business payments increasingly rely on digital assets, especially stablecoins.

The ranking is part of Chainalysis’ upcoming report on crypto adoption, which also illustrates a broader trend in Sub-Saharan Africa, a region witnessing a modest yet significant growth in its crypto adoption.

According to Chainalysis, Sub-Saharan Africa’s total contribution to the global crypto economy may be small at 2.7%, but the region received $125 billion in on-chain value between July 2023 and June 2024—a $7.5 billion increase compared to the previous year.

While several African nations, including Ethiopia, Kenya, and South Africa, have secured spots in the top 30 on the Chainalysis Global Adoption Index, Nigeria’s high adoption rates show how practical crypto has become for everyday transactions in the country, said Moyo Sodipo, COO and co-founder of Nigerian crypto exchange Busha.

“Many Nigerians are using crypto to pay bills, top up mobile credit, and make cross-border transfers as the traditional financial system grapples with inflation and currency devaluation,” Sodipo added.

The report also highlights Sub-Saharan Africa’s leadership in DeFi adoption. DeFi platforms allow users to access financial services, such as lending and borrowing, without needing 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 as of 2021, making crypto an attractive alternative for millions.

Stablecoins are pivotal 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 significant traction in countries where local currencies are volatile and access to US dollars is limited.

In Nigeria, businesses and individuals increasingly rely on stablecoins like USDT and USDC to protect their assets from the local fiat currency’s ongoing devaluation. The country’s foreign exchange shortage has further intensified the demand for stablecoins, enabling companies to conduct international trade that would otherwise be hindered by currency shortages.

“The banks don’t have dollars, the government doesn’t have dollars, and even if they did, they wouldn’t give them to you,” said Chris Maurice, CEO of African crypto exchange Yellow Card.

He explained that stablecoins serve as a reliable alternative for businesses involved in international trade, ranging from small-scale importers to large multinational corporations.

Ethiopia, the region’s fastest-growing market for stablecoin use, has seen a 180% year-over-year increase in retail-sized stablecoin transfers. This surge follows a 30% devaluation of Ethiopia’s local currency, the birr, as the government relaxed 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 using stablecoins compared to traditional fiat currency methods.

In Nigeria alone, stablecoin transactions under $1 million nearly reached $3 billion in early 2024, demonstrating their growing importance for small and medium-sized transfers.

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 rapidly growing institutional activity and TradFi integration, stands poised to be another key driver of crypto adoption in the region.

“Nigeria and South Africa are leading the way in showing how crypto can drive financial inclusion,” said Rob Downes, head of digital assets at Absa Bank in South Africa.

The above is the detailed content of Nigeria Emerges as the Second-Largest Adopter of Crypto Worldwide, Chainalysis Report Shows. For more information, please follow other related articles on the PHP Chinese website!