Nigeria Leading Africa’s Crypto Charge Amid Government Pushback

Nigeria is a paradox in the global Sub-Saharan African crypto market. It leads in crypto adoption, yet its government remains one of the most aggressive in enforcing Nigerian cryptocurrency regulations. 

Despite stringent Nigerian Central Bank crypto restrictions, Nigerian crypto users have found innovative ways to bypass crypto regulations, solidifying the country’s position as a key player in Bitcoin adoption in Nigeria.

This raises important questions: Why is Nigeria leading in Africa’s crypto market? How do users navigate government-imposed restrictions? And most importantly, is this growth sustainable in the long run? Let’s explore the dynamics that define Nigeria’s crypto journey.

Nigeria’s Crypto Journey: From Crackdowns to Regional Leadership

Nigeria’s path to becoming a global leader in cryptocurrency adoption has been marked by dramatic shifts, from regulatory crackdowns to embracing digital assets as part of its financial system. 

This journey began in 2021 when the Central Bank of Nigeria (CBN), under Governor Godwin Emefiele, imposed a sweeping ban on financial institutions from facilitating cryptocurrency transactions. 

The ban aimed to curb risks like money laundering and terrorism financing but inadvertently pushed crypto activities underground, with peer-to-peer (P2P) platforms like Binance capturing 80% of transactions by 2022. Despite the restrictions, Nigerians turned to cryptocurrencies as a lifeline amidst the worsening economic challenges.

Between 2021 and 2025, the naira’s value plummeted by over 70% against the dollar, making it one of the world’s worst-performing currencies. Double-digit inflation and high costs for cross-border remittances further eroded trust in traditional banking systems.

Stablecoins like USDT became essential for everyday transactions, remittances, and inflation hedging, with $3 billion in stablecoin inflows recorded for transactions under $1 million in Q1 2024 alone.

By 2023, the tide began to turn. The Tinubu administration signaled a shift toward economic reform, lifting the CBN’s ban on banks supporting crypto service providers. 

This move allowed banks to open accounts for crypto businesses under strict anti-money laundering (AML) and know-your-customer (KYC) measures. The policy reversal set the stage for Nigeria’s crypto economy to rebound, with transaction inflows rising by 25% year-on-year in 2024, reaching $55.4 billion.

According to the 2024 Chainalysis Crypto Adoption Index, Nigeria ranked second globally in cryptocurrency adoption in December 2024, trailing only India.

Sub-Saharan Africa received $125 billion in on-chain value between July 2023 and June 2024, with Nigeria contributing nearly half of this total. A Consensys report further highlighted that 99% of Nigerians were aware of cryptocurrencies, and 84% owned at least one crypto wallet.

Cryptocurrencies Legally Recognized in Nigeria

The culmination of these developments came in April 2025 when President Bola Tinubu signed the Investment and Securities Act (ISA). This landmark legislation formally recognized cryptocurrencies as securities and brought them under the regulatory oversight of the Securities and Exchange Commission (SEC). 

The ISA provides legal backing for crypto exchanges and platforms while excluding fiat-backed digital currencies like CBDCs. It aligns Nigeria’s capital markets with global standards, boosting investor confidence and fostering innovation in fintech.

Today, Nigeria stands as Africa’s leading crypto economy and a global trailblazer. Cryptocurrencies have evolved from speculative assets to functional tools embedded in daily financial life. 

With $59 billion in crypto value received between mid-2023 and mid-2024 alone, the country has transitioned from hostility to regulation, paving the way for increased blockchain products developments and economic diversification. Challenges remain in fully implementing these reforms, but Nigeria’s journey shows its potential as a hub for digital finance and technology in Africa.

Crypto Chaos or Comeback? Nigeria’s $59B Gamble in 2025

Nigeria’s crypto sector stands at a critical juncture in 2025, balancing hard-won regulatory progress with persistent challenges that threaten its position as Africa’s $59 billion crypto leader. 

While the Investment and Securities Bill signals a shift from hostility to structured oversight, systemic hurdles loom large:

1. Regulatory Tightrope Walk

The SEC’s accelerated licensing program has granted provisional approvals to firms like Quidax and Busha, yet 72% of crypto businesses remain unlicensed due to burdensome compliance costs.

The SEC’s decision to hike registration fees by 400%, from ₦30 million ($18,620) to ₦150 million ($93,000), creates an uneven playing field, favoring foreign giants like Bybit over local startups. Mandatory Chainalysis integration adds $120,000/year in operational costs for startups. 

This burden stifles homegrown innovation while foreign platforms exploit regulatory gaps for Naira-pegged stablecoins excluded from the 2025 Investment and Securities Bill.

2. Taxation Tensions

Taxation policies risk undermining crypto’s role as a financial lifeline. The proposed 3% levy on trades above ₦1 million ($667) threatens to revive the underground P2P economy, where 68% of users rely on sub-$50 transactions for daily survival. 

While authorities project ₦28 billion ($18.7M) in annual crypto tax revenue, this pales against the $24 billion yearly losses from oil theft, a misalignment of priorities that ignores crypto’s potential to offset systemic economic leaks. 

Bloomberg reports indicate the SEC aims to “ensure all eligible transactions enter the formal tax net,” but blanket approaches risk alienating the very users sustaining Nigeria’s $59 billion crypto economy.

3. Security vs. Innovation Paradox

Security concerns persist despite regulatory mandates. While the SEC requires insured wallets and two-factor authentication; crypto scams and meme coin pump and dump scheme are still draining millions from retail investors. 

Banks remain wary, with 85% of crypto firms dependent on offshore banking partners due to lingering fears of CBN sanctions, a fragmentation that leaves 88% of P2P transactions untraceable, complicating anti-money laundering efforts. This paradox intensifies as the EFCC battles sophisticated cybercriminal networks, including a recent 792-member syndicate funneling $2.39 million through peer-to-peer platforms.

4. Infrastructure Gaps

Nigeria’s crypto dominance masks stark inequalities: while Lagos boasts 89% internet penetration, northern states like Sokoto languish at 21%. This digital divide risks creating a two-tier system where blockchain benefits urban elites while 44 million unbanked Nigerians lack access to regulated platforms.

5. Foreign Dominance Concerns

The SEC’s ₦500 million ($333,000) license fee has allowed Asian platforms like Bybit to capture 63% of Nigeria’s crypto volume post-Binance’s 2024 exit. This trend could funnel $1.2 billion in annual fees overseas by 2026, undermining local innovation despite homegrown successes like Moniepoint’s $1 billion valuation. 

Meanwhile, the Binance saga, culminating in an $81.5 billion lawsuit and detained executives, exposes enforcement gaps that deter foreign investment while failing to curb illicit activities.

🚨 BREAKING: The Nigeria Economic and Financial Crimes Commission (EFCC) Amends $35.4M Money Laundering Charges Against Binance and Fleeing Executive Nadeem Anjarwalla!

💠 The amended charges allege concealing $35.4 million generated in Nigeria as proceeds of unlawful activity.… pic.twitter.com/bycRKsOMvh

— Coinwaft (@coinwaft) November 26, 2024

As Information Minister Mohammed Idris emphasizes, Nigeria seeks a “regulated, not restricted” crypto environment. Yet achieving this balance demands recalibrating policies to support startups, targeting high-value fraud instead of petty traders, and investing in infrastructure to democratize access. 

Until then, the nation’s crypto leadership remains precarious, a paradox of groundbreaking adoption hindered by self-imposed barriers.

The Road Ahead Of The Nigerian Crypto Market

As Nigeria solidifies its position as Africa’s cryptocurrency leader with $59 billion in annual on-chain value, three strategic pathways emerge to address persistent challenges while capitalizing on digital assets’ transformative potential. 

These initiatives aim to reconcile regulatory gaps, cybersecurity threats, and financial exclusion, legacies of previous restrictive policies that drove 72% of crypto businesses underground.

Regulatory Sandboxes

The Securities and Exchange Commission’s Accelerated Regulatory Incubation Programme (ARIP) offers a blueprint for controlled innovation. While ARIP has provisionally licensed platforms like Quidax, its ₦2 million ($1,350) processing fee and ₦20 million ($13,500) penalty for non-compliance remain prohibitive for startups targeting financial inclusion. 

A restructured sandbox could waive fees for projects developing blockchain microloans or agricultural supply-chain solutions, similar to the CBN’s successful PSV 2025 framework for crowdfunding platforms. 

The National FinTech Strategy’s recommendation to “simplify licensing regimes” through public-private working groups could also reduce approval timelines for poverty-alleviation tools from 18 months to 90 days.

Public-Private Threat Intelligence

With AI-powered scams draining ₦9.2 billion quarterly, Nigeria’s proposed National Crypto Intelligence Hub must integrate existing infrastructure, such as the Nigerian Computer Emergency Response Team (ngCERT), and adopt global standards. 

The Cyber Security Experts Association of Nigeria (CSEAN) also advocates adopting the STIX/TAXII protocols used by INTERPOL’s Cybercrime Directorate, which would enable real-time data sharing between banks, exchanges, and law enforcement. 

Pilot programs could leverage Chainalysis Reactor, which was already employed in the EFCC’s February 2025 bust of a 792-member scam network, to trace cross-border P2P transactions that are currently 88% untraceable.

Digital Literacy & Scam Awareness

The National Information Technology Development Agency (NITDA) and NYSC’s joint initiative to train 30 million youths by 2027 provides a vehicle for crypto education. Integrating modules on wallet security, DeFi protocols, and scam detection into the National Digital Literacy Framework could halve the current 41% fraud susceptibility rate. 

Practical simulations using testnet environments from licensed exchanges would equip corps members, deployed as digital ambassadors, to educate rural communities where internet penetration languishes at 21%. The initiative’s blockchain-based NYSC certificate authentication system offers a tangible example of distributed ledger benefits, fostering trust in regulated crypto applications.

Other Notable Approaches Include..

• Implementing the FinTech Strategy’s recommendation for a regulator committee to eliminate redundant rules, paired with monthly sandbox demo days for legislators.

• Replicating the FS-ISAC model for financial services, allowing banks to anonymously share scam wallet addresses with exchanges.

• Developing Yoruba, Igbo and Hausa-language crypto education apps tied to the NITDA’s 70% digital literacy target by 2027.

These pathways address legacy issues from Nigeria’s restrictive past, where prohibitions bred a $1.6 billion shadow economy, by fostering inclusive participation. As CSEAN warns, failure to act could see cybercrime losses double to $10 billion annually by 2026. 

Looking forward, strategic implementation of these initiatives will position Nigeria to secure its crypto ecosystem and export regulatory frameworks to neighboring states, further cementing its role as Africa’s digital finance leader.

Frequently Asked Questions (FAQs)