A report from Chainalysis has identified Nigeria as a global leader in cryptocurrency adoption, ranking second in the 2024 Global Crypto Adoption Index. This position is largely attributed to the country's economic challenges. The report was released on October 17.
According to Chainalysis, Nigerians are increasingly using cryptocurrency for everyday transactions such as bill payments, mobile phone credit top-ups, and retail purchases. This shift indicates a maturing market and a growing understanding of cryptocurrency's practical utility beyond speculative investment. Stablecoins, particularly USDT and USDC, are pivotal in Nigeria's crypto economy, accounting for approximately 40% of all stablecoin inflows in Sub-Saharan Africa. These stablecoins provide a hedge against inflation and naira depreciation, facilitating cheaper and faster cross-border payments and remittances compared to traditional methods.
The report also highlights Nigeria's leading role in decentralized finance (DeFi) adoption within Sub-Saharan Africa. With over $30 billion received by DeFi services in the past year, Nigerians are utilizing these platforms for earning interest, taking out loans, and engaging in decentralized trading. This activity suggests a demand for greater financial access and control in a region where traditional financial systems may not fully serve the population.
Nicholas Anthony, a policy analyst at the Cato Institute's Center for Monetary and Financial Alternatives, commented on the Nigerian government's stance towards cryptocurrency. He said that the government is "looking for anything other than its own actions to blame" for the devaluation of the naira and has pointed fingers at cryptocurrency, particularly targeting Binance. Anthony said that Nigerians' use of cryptocurrency is "a symptom, not a cause, of the naira’s failure," attributing this to "years of currency mismanagement." He noted that tensions escalated in February following "the naira’s most recent crash." Bayo Onanuga, an advisor to Nigerian President Bola Tinubu, had previously advocated for banning crypto to prevent further currency devaluation.
According to Premium Times, Nigerian lawmakers have expressed concerns over President Bola Ahmed Tinubu’s approach towards the crypto industry. Policymakers have questioned claims that crypto companies affect foreign exchange rates and criticized the detention of a Binance employee by the government as potentially damaging Nigeria's international image.
Chainalysis provides data, software, and research services to organizations worldwide including government agencies and cybersecurity firms. The company's data supports compliance efforts and investigations into high-profile cybercrime cases.
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