Nigeria and South Africa are leading Sub-Saharan Africa’s cryptocurrency adoption charge, driving substantial on-chain activity and positioning the region as an increasingly influential digital currency and financial technology innovation hub.
Between July 2023 and June 2024, Sub-Saharan Africa accounted for only 2.7 percent of the global crypto economy’s transaction volume. According to New York-based blockchain research firm Chainalysis, this is primarily due to the region’s smaller aggregate gross domestic product.
Despite this, the region recorded growth in usage, receiving an estimated $125 billion in on-chain value during this period, a $7.5 billion increase compared to 2023, as reported in Chainalysis’s ‘The 2024 Geography of Crypto Report.’
Crypto is reshaping the continent’s financial landscape, with Nigeria maintaining its position as a global leader. Between July 2023 and June 2024, the country recorded $59 billion in cryptocurrency value, ranking second worldwide despite regulatory crackdowns.
While Nigeria was the only African nation in the top 20 this year, unlike 2023, when Morocco was also ranked, this achievement came despite a national clampdown on cryptocurrency transactions in 2024. The government directed telecommunication firms to restrict access to crypto platforms and instructed operators to delist naira transactions, using Binance as a high-profile example.
Authorities accused these platforms of manipulating naira-to-dollar rates and enabling illicit transactions. Despite these challenges, Nigeria remains at the forefront of Africa’s crypto adoption, followed by Ethiopia (26th), Kenya (28th), and South Africa (30th) on the global crypto index. This success is due to crypto’s practical applications in Africa, such as business payments, inflation hedging, and frequent, smaller financial transfers.
Moyo Sodipo, chief operating officer and co-founder of Busha remarked, “People are starting to see the real-world utility of cryptocurrency, especially in day-to-day transactions, which is a shift from the earlier view of crypto as just a get-rich-quick scheme.”
He highlighted how crypto is increasingly facilitating routine activities like bill payments, mobile phone credit top-ups, and retail purchases.
The Rise of Stablecoins
Source: Chainalysis
Stablecoins have become central to crypto adoption in the region due to the high volatility of many African currencies and limited access to dollars. Chris Maurice, chief executive officer and co-founder of Yellow Card, highlighted that the ongoing foreign exchange crisis in many African countries is driving stablecoin adoption.
“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.”
For example, the New York firm highlighted that as the naira depreciated, stablecoin inflows for transactions under $1 million rose in Nigeria. BusinessDay recently reported that the naira has lost about 70 percent of its value against the dollar in the last year and is now the third worst-performing currency in the world after the Lebanese Pound and the Ethiopian Birr.
According to Chainalysis, stablecoins now constitute approximately 40 percent of Nigeria’s crypto inflows, making the country the largest stablecoin market in Sub-Saharan Africa.
Aside from currency devaluation, double-digit inflation across the region further fuels stablecoin adoption.
“We can see the impact of this trend by looking at transfer sizes under $1 million. In Q1 2024, stablecoin value approached almost $3 billion, making stablecoins the largest portion of sub-$1 million transactions in Nigeria,” the blockchain firm said.
Read also: Nigeria’s crypto transactions hit $59bn in one year on FX crisis
Chainalysis noted that Ethiopia is the fastest-growing market for retail-sized stablecoin transfers, with 180 percent growth year over year (y-o-y) after the birr (ETB) shed 30 percent of its value recently.
“Stablecoins are a proxy for the dollar,” Maurice noted. “If you can get into USDT or USDC, you can easily swap that into hard dollars elsewhere.”
This innovation offers businesses a lifeline, particularly where traditional financial institutions struggle to meet dollar demands. Rob Downes, Head of Digital Assets, ABSA Bank, highlighted the trend among institutional clients in South Africa, “Our institutional clients are particularly interested in using stablecoins as a tool for managing liquidity and reducing exposure to currency volatility.”
South Africa has seen stablecoin use grow on local exchanges, surpassing bitcoin as the most commonly received crypto in late 2023.
The New York blockchain firm further stated that stablecoins are also revolutionising cross-border payments in a region where the average cost of sending remittances is high.
“Cross-border remittances are a major use case for stablecoins in Nigeria,” Sodipo of Busha noted. “It’s much faster and more affordable.”
The Role of Decentralised Finance Platforms and Institutional Investors
Source: Chainalysis
Alongside stablecoins, decentralized finance (DeFi) platforms are furthering regional crypto adoption. Sub-Saharan Africa leads globally in DeFi adoption, with Nigeria receiving over $30 billion in value through DeFi services last year. DeFi platforms offer Africans new opportunities to earn interest, access loans, and engage in decentralised trading in a region with limited traditional banking services.
“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,” Chainalysis noted.
In South Africa, which received approximately $26 billion in value over the past year, growth has been driven by increased licensed companies and institutional-sized activity.
Downes of Absa Group said, “We are seeing growing interest from institutional clients, particularly around custody solutions for digital assets, which will play a crucial role in supporting the crypto ecosystem here.”
Carel van Wyk, founder of MoneyBadger, remarked that the changing regulatory environment is encouraging retail and professional involvement in crypto markets.
Changing Regulatory Landscape
Regulatory advancements are supporting crypto adoption. Governments in Nigeria, South Africa, Ghana, Mauritius, and Seychelles are developing frameworks to address increasing exchange volumes and market demand.
In December 2023, Nigeria’s Central Bank lifted a ban on banks serving crypto firms. Subsequently, the Securities and Exchange Commission introduced the Accelerated Regulation Incubation Program (ARIP), granting operational approvals to multiple crypto operators. Emonotimi Agama, SEC Director-General, noted that 50 cryptocurrency exchanges had applied for licenses, reflecting growing industry interest.
Sodipo of Busha stated, “The industry is bullish on ARIP; it’s a shift away from uncertainty and a positive move towards regulatory clarity.”
In South Africa, the Financial Sector Conduct Authority (FSCA) has classified crypto assets as financial products, catalysing growth by providing regulatory certainty.
“The regulatory environment here is relatively favorable compared to other regions. It’s giving us the confidence to explore more robust solutions like custody and payments,” noted Downes of Absa Group.
Chainalysis concluded that although Sub-Saharan Africa represents a relatively small share of the global crypto economy, its momentum is significant. Nigeria and South Africa are driving this growth, positioning the region as a global leader with the potential to deliver financial innovation and inclusion.
It added, “Africa’s real-world crypto use cases carry valuable lessons for the global market. With a vibrant fintech landscape, expanding mobile penetration, and potential for collaboration between regulators, TradFi, and crypto companies, the continent is well-positioned to emerge as a global crypto leader, with immense promise to drive innovation and financial inclusion on a large scale.”
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