Nigeria Leads Africa With $22B Stablecoin Transactions Amid Dollar Scarcity

Nigeria has emerged as Africa's largest stablecoin market, recording nearly $22 billion in transactions between July 2023 and June 2024, driven by the scarcity of foreign exchange and persistent volatility of the naira. Stablecoins, which now represent 43% of all crypto transaction volumes in Sub-Saharan Africa, provide Nigerians a vital alternative for cross-border payments, treasury management, and inflation hedging amid challenges in the traditional banking system. Western Union's plan to integrate USD-backed stablecoins into its global payment network could disrupt Nigeria's remittance market by bypassing local banks, threatening their fee income and challenging the stability of the naira. The growing adoption of stablecoins is also accelerated by recent U.S. tariffs on exports from African nations and regulatory clarity from the U.S. GENIUS Act, boosting confidence in digital assets. Despite the benefits, risks such as over-dependence on the U.S. dollar, rural digital literacy gaps, and infrastructure limitations remain concerns for broader stablecoin adoption. Overall, stablecoins are reshaping Nigeria's financial landscape by enhancing financial inclusion, reducing costs, and providing resilience against currency fluctuations.