In a small shop tucked away in Onitsha’s bustling market district, a trader unlocks her smartphone, checks the day’s crypto rates, and sends USDT to her supplier in Guangzhou, China – no delays, no middlemen, and near-instant delivery. It’s a transaction that once took three days or more with hefty foreign exchange fees. Now, it takes less than three minutes. This is the quiet revolution cryptocurrency is powering across Nigeria.
Between July 2023 and June 2024, Nigerians traded over $59 billion in crypto, making the country the second-largest market in the world. And while there’s still some speculative activity, more people are turning to crypto as a functional tool, one that solves real problems in everyday life. It’s meeting financial needs that the traditional system can’t always reach, or can’t reach fast enough. It’s not replacing banks, but it is expanding what’s possible.
With a smartphone, individuals, including the financially excluded, can access digital wallets, save in stablecoins, send money across borders, and get paid in real time. In a country where financial needs are shifting rapidly, crypto is giving people accelerated options, and that flexibility matters. Similar to how many SMEs now rely on USDT to pay overseas suppliers, high-net-worth individuals are also using USD equivalents to preserve value in an inflationary economy, access liquidity, and keep their businesses running smoothly.
Beyond individual convenience, the functional utility of crypto extends to businesses, creating significant ripple effects across key sectors. In fintech, for instance, it’s powering the growth of decentralised finance (DeFi), offering instant remittance options and novel investment tools. Similarly, e-commerce and retail are gaining efficiency through borderless payments and reduced fees. In the creative economy, freelancers are bypassing payment delays and gatekeepers. Perhaps most significantly, in cross-border trade, stablecoins are providing a vital lifeline for Nigerian businesses grappling with dollar scarcity and currency volatility, simplifying international sourcing and settlements within Africa and beyond.
From our vantage point at Luno, we’ve seen users increasingly turn to stablecoins like USDT to address these pain points: facilitating swift payments to global partners, securing stable dollar access, and shielding capital from inflation. The popularity of stablecoins among SMEs and high-volume traders points to their reliability in cross-border dealings, while freelancers and importers depend on their speed and stability to participate in the global economy.
Despite this growth, the conversation around cryptocurrency regulation in Nigeria remains complex. Yet from our experience, working closely with regulators can be a win-win for users, government, and industry players alike. Nigerians are already active crypto participants, and ensuring their security is paramount. While many platforms maintain high security standards, regulatory oversight provides an added layer of protection. It can help users access crypto safely while reducing exposure to scams and Ponzi schemes.
Beyond safeguarding users, regulation presents tangible benefits for the government. With an estimated 80% of crypto transactions occurring informally, often peer-to-peer, much of the activity remains outside the tax and legal framework, leaving considerable revenue untapped. This is especially relevant as the market is projected to reach $1.6 billion in revenue by 2025.
Clear, forward-looking regulation could also help stem the outflow of Nigerian talent. Many developers, fintech founders, and startups are incorporating in jurisdictions like the UAE and the UK, where crypto policies are more clearly defined. Regulatory clarity at home could keep this innovation local, strengthening Nigeria’s ecosystem rather than dispersing it.
Moreover, regulation can help build trust and confidence in the crypto space. South Africa offers a compelling example: its introduction of a crypto licensing regime in 2023 coincided with a marked decline in scam-related complaints, demonstrating that smart regulation can create a safer and more resilient sector. Nigeria can follow suit, protecting users while fostering responsible innovation.
Globally, countries like Singapore, the UAE, and South Africa are moving decisively on crypto regulation, attracting investment and innovation in the process. Nigeria, with one of the most engaged crypto user bases in the world, has every reason to lead. We have a chance not only to regulate, but to enable.
The Securities and Exchange Commission (SEC)’s Accelerated Regulatory Incubation Programme (ARIP) is a promising first step toward building a more structured, secure, and innovation-friendly digital finance ecosystem. By offering startups regulatory clarity and a path to compliance, ARIP is laying the groundwork for a stronger, safer crypto sector. With two local exchanges already accepted into the sandbox, expanding the program to include more players could create a richer, more competitive ecosystem and unlock the full potential of crypto as a growth driver for Nigeria.
Nigeria has the talent, the tech-savvy population, and the appetite for innovation. With the right regulatory support, we can harness crypto not just as a financial tool but as a catalyst for broader economic transformation. It’s not about choosing between innovation and oversight; it’s about designing a framework that allows both to thrive. If we get it right, crypto can be more than a workaround. It can be a cornerstone of Nigeria’s digital future.
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Ayotunde Alabi is the CEO of Luno Nigeria with over a decade of experience in finance and technology. He has previously held leadership positions at Spektra, ARM HoldCo, FBNQuest, and Heritage Bank Limited. He is a SEC-sponsored professional with certifications from Nigeria’s Chartered Institute of Stockbrokers and the UK’s Chartered Institute for Securities & Investment.
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