According to an upcoming report from Chainalysis, Nigeria has emerged as the second country in the world to adopt cryptocurrencies, cementing its position as a leader in digital finance.
This ranking is indicative of Nigeria’s rapidly expanding cryptocurrency ecosystem, where daily transactions, remittances and corporate payments increasingly rely on digital assets, particularly stablecoins. The country’s success reflects broader trends in sub-Saharan Africa, where cryptocurrency adoption is slowly but significantly increasing.
According to Chainalysis, sub-Saharan Africa’s crypto economy is booming, driven by the need for alternative financial services and more accessible international markets, positioning the region as a growing hub for innovation and financial inclusion on the global stage. It is said that it is positioned.
Steady growth across sub-Saharan Africa
Despite accounting for 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 year-on-year. I recorded it.
Although 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, all secure positions within the top 30 in the Chaineries Global Adoption Index.
Moyo Sodipo, COO and co-founder of Nigerian cryptocurrency exchange Busha, said:
“Nigeria’s high adoption rate shows how practical cryptocurrencies are for everyday transactions.”
Sodipo noted that as the traditional financial system suffers from inflation and currency devaluation, many Nigerians are turning to cryptocurrencies to pay bills, top up mobile credit and send money across borders. .
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 the need for traditional banks, which are out of reach for many.
The World Bank estimates that only 49% of adults in the region have access to a bank account in 2021, making cryptocurrencies an attractive alternative for millions of people. .
Stablecoins promote economic stability
Stablecoins are crucial to sub-Saharan Africa’s crypto economy, with Chainalysis estimating that stablecoins account for 43% of all crypto transactions in the region. These dollar-pegged digital currencies are gaining significant traction in countries where local currencies are unstable and access to the US dollar is limited.
In Nigeria, businesses and individuals are increasingly relying on stablecoins such as USDT and USDC to protect their assets from the continued devaluation of the local fiat currency. The country’s foreign currency shortage has further increased demand for stablecoins, allowing companies to conduct international trade that would otherwise be hampered by a currency shortage.
Chris Morris, CEO of African cryptocurrency exchange Yellowcard, said:
“Banks don’t have dollars, the government doesn’t have dollars, and even if they had dollars, they wouldn’t give you dollars.”
He explained that stablecoins serve as a reliable alternative for companies involved in international trade, from small importers to large multinational corporations.
Ethiopia, the fastest growing stablecoin market in the region, has seen a 180% year-over-year increase in retail-scale stablecoin remittances. The jump follows a 30% devaluation of Ethiopia’s local currency, the Birr, after the government eased currency restrictions in exchange for $10.7 billion in loans from the IMF and World Bank.
Stablecoins are also revolutionizing cross-border payments across Africa. Remittances, a key source of income for many African households, are now significantly cheaper and faster using stablecoins compared to traditional fiat currency methods.
In Nigeria alone, stablecoin transactions of less than $1 million will reach nearly $3 billion by early 2024, demonstrating the growing importance of stablecoins for small and medium-sized remittances.
Cryptocurrency and financial inclusion
As Nigeria and other sub-Saharan countries deepen their engagement with cryptocurrencies, stablecoins could play a central role in stabilizing economies, facilitating international trade, and enabling cross-border payments. It is expected.
South Africa is poised to become another major driver of cryptocurrency adoption in the region, with rapidly growing institutional investor activity and TradFi integration.
Rob Downs, head of digital assets at Absa Bank in South Africa, said:
“Nigeria and South Africa are leading the way in demonstrating how cryptocurrencies can drive financial inclusion.”
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