The latest report from blockchain analytics firm Chainalysis has placed Nigeria in the second spot on the list of countries leading crypto adoption globally, having received approximately $59 billion in cryptocurrency value between July 2023 and June 2024.
The Chainalyisis report titled: the 2024 Geography of Cryptocurrency Report, says Nigeria received around $59 billion worth of crypto between July 2023 and June 2024, while other African countries that made the list include Ethiopia, Kenya, and South Africa which all clinched a spot in the top 30.
It is noteworthy that Nigeria achieved this feat despite the fact that 2024 has been a year of clampdown on crypto companies as well as users in the country.
Shutdown and restrictions of crypto companies like Binance, OKX, KuCoin and others have done just little to deter the country’s crypto enthusiasts from trading in digital currencies if the Chainalysis report released this October, is anything to go by.
Cryptocurrency is undeniably transforming the financial landscape of the region, home to a number of high ranking nations on the firm’s global adoption index.
Crypto’s practical use cases in Africa are especially compelling. Africans are leveraging crypto for business payments, as a hedge against inflation, and for more frequent, smaller (i.e. retail-sized) transfers.
According to the report, as in Ethiopia, Ghana, and South Africa, stablecoins are also a major part of Nigeria’s crypto economy, accounting for approximately 40 percent of all stablecoin inflows in the region — by far the highest in all of Sub-Saharan Africa.
Many Nigerians rely on stablecoins to send money across borders due to the inefficiencies and high costs associated with traditional remittance channels. Cross-border remittances are a major use case for stablecoins in Nigeria, and It is much faster and more affordable according to experts.
Notably, Sub-Saharan Africa leads the world in DeFi adoption, likely driven in part by a growing need for accessible financial services in a region where only 49 percent of adults had a bank account as of 2021, according to the World Bank.
A major driver of stablecoin adoption in Africa is the foreign exchange (FX) crisis gripping many countries.
“About 70 percent of African countries are facing an FX shortage, and businesses are struggling to get access to the dollars they need to operate,” Maurice explained. “Stablecoins provide an opportunity for these businesses to continue to operate, grow, and strengthen the local economy,
“As the naira depreciates, we can see a rise in stablecoin inflows for transactions under $1 million, with more pronounced activity during periods of significant currency devaluation.
“Ethiopia, Africa’s second-most populous nation with 123 million people, is now its fastest-growing market for retail-sized stablecoin transfers, with 180 percent in growth, year-over-year (YoY).
“Between the fourth quarter of 2023 and the first quarter of 2024, the total value of global crypto activity increased substantially, reaching higher levels than those of 2021 during the crypto bull market. We can see where we apply our Adoption Index methodology globally by adding all 151 countries’ index scores for each quarter from Q3 2021 to Q2 2024, and re-indexing them again to show global adoption growth over time,” the 2024 Global Crypto Adoption Index stated.
It further disclosed that Last year, growth in crypto adoption was driven primarily by lower-middle-income countries. This year, however, crypto activity increased across countries of all income brackets, with a pullback in high-income countries since the beginning of 2024.
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