Cryptocurrency usage is on the rise in Nigeria as the country faces a weakening currency and increasing inflation, according to a recent report by Chainalysis, a blockchain research firm based in New York. Between July 2022 and June 2023, the volume of crypto transactions in Nigeria grew by 9% year-over-year to reach $56.7 billion. This growth is partly attributed to increased interest in bitcoin and stablecoins, particularly during periods when the naira’s value saw significant drops, especially in June and July 2023.
President Bola Tinubu’s recent economic reforms, which included eliminating a costly petrol subsidy and removing certain exchange rate restrictions, have contributed to the naira’s record-low valuation. These changes have driven more Nigerians to seek financial stability through cryptocurrencies. Moyo Sodipo, co-founder of the Nigerian cryptocurrency exchange Busha, noted that people are actively looking for ways to hedge against the devaluation of the naira and the ongoing economic decline since the COVID-19 pandemic.
Despite a 2021 ban on banks and financial institutions dealing in cryptocurrencies, Nigeria has seen a rise in peer-to-peer trading facilitated by crypto exchanges. This indicates a strong adoption of digital assets among the country’s young, tech-savvy population. In response to the increasing interest and usage, Nigeria’s financial regulator issued a set of regulations for digital assets last year, attempting to balance between an outright ban and unregulated use of cryptocurrencies.
In comparison, Uganda’s cryptocurrency usage grew significantly by 245% to $1.6 billion, whereas Kenya saw a decline of over 50% to $8.4 billion during the same period.
