The development highlights how millions of Nigerians are increasingly turning to cryptocurrencies and stablecoins as alternatives to conventional financial channels amid persistent economic uncertainties and difficulties accessing foreign currency.

According to industry data, Nigeria now ranks among the most active cryptocurrency markets globally, with digital assets becoming a mainstream tool for remittances, savings, payments and international transfers.

The country’s growing influence in the digital asset ecosystem comes despite years of regulatory uncertainty and crackdowns on some cryptocurrency platforms.

Yet, market activity has remained resilient, driven largely by retail users seeking faster and cheaper alternatives to traditional financial services.

Meanwhile, data from blockchain analytics firm Chainalysis shows that Nigeria recorded approximately $59 billion in cryptocurrency transactions between July 2023 and June 2024, placing it among the world’s largest crypto markets.

Around 85 per cent of those transactions were valued below $1 million, indicating strong participation by individuals and small businesses rather than institutional investors.

Industry operators argue that cryptocurrencies are increasingly being used for practical purposes rather than speculation.

Moyo Sodipo, chief operating officer and co-founder of Busha, said users are beginning to recognise the everyday utility of digital assets.

“People are starting to see the real-world utility of cryptocurrency, especially in day-to-day transactions,” he said.

He further noted that crypto is increasingly being used for bill payments, mobile airtime purchases and retail transactions.

Stablecoins which are pegged to major currencies such as the US dollar, have emerged as a key driver of adoption.

Chainalysis estimates that stablecoins account for roughly 40 per cent of Nigeria’s crypto inflows, making the country the largest stablecoin market in Sub-Saharan Africa.

The growing use of stablecoins has been linked to persistent foreign exchange shortages and the need by businesses and individuals to preserve value in the face of currency volatility.

Chris Maurice, chief executive officer of Yellow Card, said stablecoins provide businesses with access to dollar-denominated assets when conventional channels are constrained.

“About 70 per cent of African countries are facing an FX shortage, and businesses are struggling to get access to the dollars they need to operate,” Maurice said.

Prior to retail payments, digital assets are also becoming increasingly important for remittances and cross-border trade. Industry stakeholders say cryptocurrency-based transfers offer faster settlement times and lower transaction costs compared to traditional channels.

The surge in adoption comes as Nigeria gradually moves towards a more structured regulatory framework for digital assets.

The country has shifted from an era of restrictions to one focused on licensing and oversight, with authorities seeking to balance innovation with consumer protection.

Experts believe that regulatory clarity, combined with growing digital literacy and widespread smartphone adoption, could further accelerate cryptocurrency usage across the country.

However, they also caution that issues relating to consumer protection, fraud prevention, taxation and market stability will remain critical as the sector continues to expand.

For policymakers, Nigeria’s leadership in global crypto transfers presents both an opportunity and a challenge: harnessing innovation to deepen financial inclusion while ensuring adequate safeguards in an increasingly digital financial system.

Like millions of others in Africa’s most populous country, trading cryptocurrencies like Bitcoin, which was created as the first digital currency in 2009, has become one of the legitimate ways of making money in a country grappling with immense poverty and underemployment.

The year was 2021, and despite trading in cryptocurrency not being regarded as a crime, it was under governmental restrictions as financial institutions, in February of that year, were banned from allowing cryptocurrency transactions.

“All DMBs, NBFIs, and OFIs, are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately,” the Central Bank of Nigeria (CBN) instructed banks and financial institutions in a circular dated February 5, 2021.

The possible closure of accounts due to their engagement in crypto transactions sent rippling fear and panic through Nigeria’s crypto community.

However, instead of abandoning exchanges, many Nigerians, already beginning to see the financial rewards that sometimes accompany digital currency, with Bitcoin having soared from $0.003 on March 17, 2010, when its price was first recorded, to $33,114.36 by January 31, 2021, actively sought alternatives.

Not only did this ban give rise to the birth of online crypto vendors, but it accelerated the adoption of Peer-to-Peer (P2P) transactions, a feature of exchanges that was first introduced by Binance the previous year as talk of a potential ban intensified.

With the inability to buy and sell directly from their banks, Chiemela, like millions of other Nigerian traders, turned to online vendors, including foreign individuals.

According to him, one of such foreign individuals was a Chinese man who, capitalizing on the ban, positioned himself as the go-to vendor. Nigerians who wished to continue trading would send him crypto, and he would in turn credit them in naira.

“As it was with many that have occurred ever since, the transactions were going well until all of a sudden, this Chinese vendor disappeared with over N100 million in funds of me and my friends. I lost N5 million in that scam,” Chiemela said.

Those were the early days of Nigerians pivoting to online crypto vendors to circumvent governmental restrictions. But within that period, the proliferation of P2P exploded equally.

According to some reports, P2P fueled the adoption of digital assets so much that dealing in crypto became widespread, with Nigerians conducting over $59 billion in crypto transactions between July 2023 and July 2024.

But there are inherent issues in these two means of crypto transactions.

First, within the P2P framework, although there appeared to be heightened security in major platforms that still allow the service, as Binance was forced to discontinue P2P in Nigeria following its clash with the Nigerian government, loopholes exist and are being exploited by people.

According to Eze Prince, a Port Harcourt-based trader, users who are inexperienced or not cautious enough risk losing their money during a P2P transaction.

“There are instances where people in the platform would send fake payment receipts to traders seeking to sell their coins. If you are not careful and verify the transaction, and release the coin in a haste, your money will be gone,” he said.

Another user, Gabriel Nwafor, spoke of an experience where traders would send amounts much lower than the coin’s price.

“I’ve had bad experiences with P2P platforms. I’ve had my money locked up for an entire day because of disputes. Imagine needing that money urgently. Or cases where someone underpaid me, like instead of 200k, they sent 150k, hoping I wouldn’t notice before confirming the transaction. Some people do that intentionally. And even when you raise disputes, the appeals process delays everything,” Nwafor said.

Due to the complex nature of P2P transactions, ridden with several instructions and guidelines, new users often experience challenges in understanding what needs to be done.

This can lead to outright loss of their money when they fail to comply within the 15 minutes required to make a transfer and send proof of payment.

Transactions with online vendors, the informal sector, are ridden with even more challenges.

“Some people who are not yet proficient with using P2P now turn to vendors but the risk of such online, informal transactions is high,” Nwafor said.

He continued: “Recently, one of my friends sent $5,000 worth of crypto to a vendor to get the naira equivalent. The vendor simply blocked him everywhere, yet he’s still online, posting Bible verses like nothing happened. That’s the kind of environment we’re operating in.”

But despite the cynicism, understandable due to the crime that has been associated with crypto, Nigerians, according to Chigemezu Ofoegbu, are increasingly adopting the use of the digital asset, not only as a money-making venture, but as a means of payment, a tool for receiving and sending money across borders.

Ofoegbu, who is the founder of Coinveto, a platform that allows users to convert their money directly from crypto to naira into their bank account without P2P or online vendors who might abscond with their money, says that “majority of Nigerians are dealing in crypto not because they want to trade. Rather, the majority are using crypto to receive money from foreign companies.”

The issue of cross-border payment has remained a major challenge for many Nigerians, from freelancers to entrepreneurs looking to expand their business beyond Nigeria.

Due to several issues, including scarcity of dollars and infrastructural weaknesses within Nigeria’s payment system (gateways), many Nigerians are pivoting to crypto and the exchanges that enable them to facilitate their international online transactions.

“For example, I recently wanted to pay for hosting. I tried all my cards from Visa to Mastercard, and none of them worked. This is despite the Nigerian government saying cards are working and one can make international payment. But the reality is that they’ll work today, tomorrow they won’t,” Ofoegbu said.

The gig economy, freelance writers, designers, developers, virtual assistants, and creators, has risen sharply in Nigeria, contributing significantly to the country’s economy.

With youth unemployment persistently high, the sector has become a vital alternative source of livelihood for many.

According to estimates from the World Bank, Africa’s gig economy could create millions of jobs by 2030, and Nigeria, with its young population, is already positioned as a hub.

But for this potential to truly flourish, access to reliable cross-border payment remains critical. Many freelancers and gig workers in Nigeria now rely on crypto as the primary way to receive payments from clients abroad.

A Nigerian freelance photographer for some of foreign media houses, who pleaded anonymity, said that he believes crypto as a payment system is the future.

“I honestly believe that accepting crypto is where the world and the future is going,” he said.

Yet, after accepting payment in crypto, the challenge often becomes how to safely convert it into naira for local use.

This is where Ofoegbu believes Coinveto provides a safer and more efficient alternative to P2P and informal vendors.

“With Coinveto, you log into our Telegram bot. You see the rate immediately. If you click ‘open wallet,’ the bot generates a personalized wallet address. Any crypto you send there (BTC or USDT) is automatically converted to naira and sent directly to your bank account.”

According to Ofoegbu, it takes less than 30 seconds to 1 minute, making Coinveto a 24/7 crypto vendor that never delays you, never disappears, and never cheats due to its compliance with the recent Investment and Securities Act 2025.

“Since April 1st when we launched, we’ve processed close to ₦100 million in volume. That shows the demand is real,” he said.

Nigeria today ranks among the highest adopters of cryptocurrency globally, with reports from Chainalysis repeatedly placing the country in the top tier of crypto usage.

This widespread adoption highlights both the demand and the necessity: millions of Nigerians are already using digital assets, not just as speculative tools, but as practical payment systems.

If harnessed properly, with safer platforms and clearer regulatory structures, crypto could ease Nigeria’s cross-border payment struggles, empower the gig economy, and ultimately channel billions into the formal economy, providing a much-needed boost to growth and youth employment.

[Featured Image source]

While many consider investing in crypto to hedge against currency inflation, some skip the volatility for stablecoins’ stability.

Stablecoins are dollar-pegged cryptocurrencies like USDT, USDC, BUSD, etc., offering the benefits of crypto without the volatility risk.

While these coins do not promise a 10x moonshot, they offer the means for Nigerians to save in dollars.

Furthermore, platforms like Dtunes.ng allow quick cash-to-crypto conversion, without paperwork or forex queues.

Why Nigerians Are Holding Stablecoins

Nigerians have found a new affinity for stablecoins, and the reasons are rooted in the country’s harsh economic realities.

The Naira has lost significant value since 2023, as the Naira to dollar rate has risen from N388 to N1550. Amid this, the price for day-to-day goods has more than doubled, while salaries and Naira savings have remained stagnant.

For many, stablecoins have become useful as modern-day digital savings accounts. Besides, stablecoins are more accessible dollar currency to many Nigerians compared to dorm accounts or foreign exchange from financial institutions.

With platforms like Dtunes.ng, you can easily log in to the app and have your stablecoins in USDT or USDC in minutes.

What The Experts Are Saying

A Chainalysis report from October 2024 highlights Nigeria as a top global player in the crypto market. According to the report, Nigeria ranked second worldwide in the Global Adoption Index, with African countries like Ethiopia (26), Kenya (26), and South Africa (30) also making the top 30.

This report further highlighted the growing need for accessible financial services, hedge against inflation, payments for business, and retail-sized transfers as key drivers of this increasing adoption in Sub-Saharan Africa. Chainalysis reported that stablecoins accounted for 43% of the region’s total transaction volume between July 2023 and June 2024. 

Furthermore, the report recognized Nigeria’s role as a major player, highlighting the naira devaluation fueling stablecoin usage.

Nigeria reportedly processed approximately $59 billion in crypto transactions during the monitored timeframe. 85% of those transactions are under $1 million, indicating a solid presence of smaller retail and professional transactions.

On the ground, Nigerian freelancers, traders, and tech-savvy savers have prioritized the stability of stablecoins over speculation on other crypto assets. Considering recent economic realities, experts believe stablecoins might be the smartest hold for Nigerians.

Both Sides of The Stablecoin

Stablecoins offer the preferred middle ground for Nigerians who do not want to save in Naira, and do not want exposure to the price fluctuations of cryptocurrencies like Bitcoin or Ethereum. The key benefit of stablecoins is their stability.

Pegged 1:1 to the dollar unlocks global utility and preserves your purchasing power while the local currency slides. 

Amid the forex scarcity in Nigeria over the past years, stablecoins offer much more liquidity as platforms like Dtunes.ng let you sell within minutes.

Beyond that, there are multiple opportunities for passive earnings on stablecoins. Some crypto wallets and DeFi platforms offer up to 5 – 10% APY on stablecoins, allowing you to put your money to work.

Download Dtunes app here

However, there are two sides to a coin, so let’s discuss potential limitations or risks to stablecoins.

Stablecoins come with a centralization concern as opposed to many other cryptocurrencies. Private companies issue stablecoins like USDT and USDC and this means they can blacklisted, frozen, or restricted based on internal policies or external pressure from authorities.

While they still offer the same privacy as cryptocurrency, this highlights a major misconception for many new stablecoin users. 

Also, these centralization elements pose a counterparty risk for stablecoin holders, like most financial companies do. Your funds could be affected if the issuing company mismanages the reserves or faces legal trouble.

The collapse of TerraUSD (an algorithmic stablecoin) in 2022 is a cautionary tale for potential stablecoin holders.

However, it’s important to note that stablecoins like USDT and USDC are fiat-backed and have been considered some of the more secure stablecoins for individuals.

Depegging is one of the biggest risks with stablecoins, which is when a stablecoin loses its 1:1 peg to the US dollar.

The TerraUSD collapse started as a simple depeg. However, the lack of true reserves combined with market manipulation resulted in a massive price crash and huge losses for the stablecoin holders.

Moreover, fiat-backed stablecoins like USDT and USDC have seen temporary depegs, often triggered by negative news about the issuing company or liquidity pressure. Nevertheless, it has proven to be nothing to worry about over the years.

Final Thoughts

While stablecoins may not always be the wise investment choice, they make the most sense for Nigerians. The coins offer a safe parking spot between keeping savings in Naira and crypto volatility, as the risk of a Naira devaluation lingers.

They have proven to help protect value, stay liquid, and provide money without friction for most Nigerians over the past few years. And sometimes not losing is the smartest move rather than chasing pumps.

According to the latest Chainalysis report, obtained on Thursday, it was revealed that those illicit funds dropped by approximately $9.3bn from $31.5bn in 2022 to $22.2bn in 2023 which is about 29 per cent.

The blockchain research platform noted that the drop could be attributed to an overall decrease in crypto transaction volume, both legitimate and illicit.

Chainalysis noted that centralised exchanges had been the primary destination for funds sent from illicit addresses, at a rate that has remained relatively stable over the last five years.

“Over time, the role of illicit services has shrunk, while the share of illicit funds going to DeFi protocols has grown.

“We attribute this primarily to the overall growth of DeFi generally during the period, but must also note that DeFi’s inherent transparency generally makes it a poor choice for obfuscating the movement of funds,” it said.

The firm indicated that the 2023 trend closely resembled 2022 regarding the breakdown of service types used for money laundering.

However, it added that there was a slight decrease in the share of illicit funds directed to illicit service types, accompanied by an increase in funds moving towards gambling services and bridge protocols.

“If we zoom in to look at how specific types of crypto criminals laundered money, we can see that there was a significant change in some areas. Most notably, we saw a huge increase in the volume of funds sent to cross-chain bridges from addresses associated with stolen funds.

“We also observed a substantial increase in funds sent from ransomware to gambling platforms, and in funds sent to bridges from ransomware wallets,” it added.

Further, Chainalysis said 109 exchange deposit addresses received over $10m worth of illicit cryptocurrency each, and collectively, they received $3.4bn in illicit cryptocurrency in 2023.

“While that still represents significant concentration, in 2022, only 40 addresses received over $10m in illicit crypto, for a collective total of just under $2.0bn.

The report, “Latest Evolution of ‘Pig Butchering’ Scam Lures Victim in Fake Mining Scheme,” details the story of one of the scammed victims in the pools, named *Frank, and how he lost $22,000 in one week after “someone” pretending to be “Vivian” on the dating app MeetMe contacted him.

After Sophos X-Ops investigated Frank’s story, the team uncovered a total of 14 domains associated with the scam operation, as well as dozens of nearly identical fraud sites that, together, netted this one “ring” of pig butcherers more than $1 million in three months.

This scam takes advantage of the largely unregulated world of decentralized finance (DeFI) cryptocurrency trading applications. Such applications create “liquidity pools” of various types of cryptocurrencies that users can then access to make trades from one cryptocurrency to another. Those who participate in the pool receive a percentage of any fee paid when a trade is made, creating an enticing return on investment.

To join a pool, participants first have to sign an online smart contract—a contract that gives another account (typically the operators of the pool) permission to access participants’ wallets to facilitate trades.

Fake pools, which pig butcherers are increasingly utilizing to siphon funds from targets, operate in much the same way. However, unlike legitimate pools, at some point these scammers “pull the rug” and empty the entire liquidity pool for themselves.

“When we first discovered these fake liquidity pools, it was rather primitive and still developing. Now, we’re seeing sha zhu pan scammers taking this particular brand of cryptocurrency fraud and seamlessly integrating it into their existing set of tactics, such as luring targets over dating apps. Very few understand how legitimate cryptocurrency trading works, so it’s easy for these scammers to con their targets. There are even toolkits now for this sort of scam, making it simple for different pig butchering operations to add this type of crypto fraud to their arsenal. While last year, Sophos tracked dozens of these fraudulent ‘liquidity pool’ sites, now we’re seeing more than 500,” said Sean Gallagher, principal threat researcher, Sophos.

Sophos X-Ops first learned of this liquidity mining operation from a victim named Frank. Frank had connected on the dating app MeetMe with a scammer hiding behind the persona of Vivian, a German woman supposedly living in Washington, D.C. for work. For weeks, Frank chatted with Vivian, who mixed her romantic promises with persistent attempts to convince Frank to invest in crypto.

Eventually, Frank opened a Trust Wallet account (a legitimate app for converting dollars to cryptocurrency) and connected to the link to the liquidity pool site Vivian recommended.

In reality, the pool site was a fraud site utilizing the brand of Allnodes, an established decentralized finance platform provider, as a cover. Between May 31 and June 5, Frank invested $22,000 in the scheme. Just three days later, the scammers emptied Frank’s digital wallet.

Frank, looking to recover his money, turned to Vivan, who claimed he needed to invest even more in the pool to recover his funds and reap the “rewards.” While waiting for his bank to authorize a money transfer to Coinbase, Frank started researching what was going on and came across an article on liquidity mining from Sophos. At this point, Frank reached out to Gallagher for help.

Even after Gallagher instructed Frank to block Vivian, she eventually found him on Telegram and continued her attempts to entice him into “continuing their investment,” going so far as to send a lengthy, emotional letter that was very likely created by a generative AI app.

“What makes these sorts of scams particularly tricky is that they don’t require any malware to be installed on a victim’s device. They don’t even involve a fake app, like some of those we’ve encountered in other CryptoRom scams. This entire fake liquidity pool was run through the legitimate Trust Wallet app. At one point, Frank even tried to contact Trust Wallet’s support to recover his money, but he connected with a fake support contact from the fraudulent liquidity pool site. There is no regulation of these pools, legitimate or otherwise, on these crypto apps. These scams succeed solely through social engineering, and the scammers are persistent. Vivian continued trying to contact Frank for weeks after he blocked her on WhatsApp.

“The only way to stay safe from these scams is to be vigilant and know that they exist and how they operate. That is why Frank wanted to share his story. Users need be wary of anyone they have no connection with reaching out to them suddenly via any dating app or social media platform, particularly if the ‘person’ reaching out wants to move the conversation to a platform like WhatsApp and then discusses investing in cryptocurrency,” said Gallagher.

Sophos has shared its data on this case with Chainalysis and Coinbase, as well as other threat intelligence professionals in the cryptocurrency space, all of whom continue to investigate. People who believe they may be a victim of pig butchering or liquidity mining fraud are free to reach out to Sophos. They should also reach out to their local law enforcement for assistance.

*[Name has been changed to protect the privacy of the victim].