Market News

Nigeria has emerged as Africa’s largest stablecoin market, with nearly $22 billion worth of transactions recorded between July 2023 and June 2024, according to a new report by Yellow Card, a leading stablecoin payments infrastructure provider.

The report, ‘Stablecoin Adoption in Emerging Markets’, released on Tuesday, highlights the extent to which Nigerians have turned to stablecoins as a hedge against foreign exchange scarcity and the naira’s persistent volatility.

Stablecoins now account for 43 percent of all crypto transaction volumes in Sub-Saharan Africa, underscoring their growing importance as a financial tool.

“Stablecoins are becoming a crucial part of Nigeria’s financial ecosystem, providing individuals and businesses with a stable and efficient way to manage cross-border payments, treasury operations, and inflation pressures,” said Lasbery Chioma Oludimu, vice president of global operations and managing director of Yellow Card Nigeria.

The findings suggest that Nigerians are increasingly using dollar-backed stablecoins to bypass challenges in accessing foreign currency through traditional banking systems. With the naira’s sharp fluctuations against the dollar and chronic shortages in official FX markets, many importers, SMEs, and even households are leaning on stablecoins to protect purchasing power and sustain trade.

Somtochukwu Nsofor, Nigeria country manager at Yellow Card, noted that the technology holds significant promise for critical sectors such as oil and gas, manufacturing, and banking. “By enabling fast, low-cost cross-border payments and reducing exposure to FX risks, stablecoins are emerging as vital tools for business resilience,” he said.

However, Nsofor cautioned that risks such as over-dependence on the dollar, rural digital literacy gaps, and infrastructure limitations could slow broader adoption.

Globally, stablecoins have grown from a market capitalization of $5 billion in 2020 to $230 billion as of May 2025. But their real impact, Yellow Card argues, is most visible in emerging markets like Nigeria, where they provide a bridge for financial inclusion in environments where traditional systems are unreliable.

External shocks are also accelerating adoption. The report noted that the United States’ decision in August 2025 to impose tariffs of up to 30 percent on exports from 47 African nations has pushed more African businesses to rely on dollar-backed stablecoins for trade. Similarly, the passage of the GENIUS Act in the U.S. earlier this year, which established a regulatory framework for stablecoins, has indirectly boosted confidence in African markets.

In Nigeria, regulators are beginning to take note. The Securities and Exchange Commission (SEC) recently unveiled the ‘Crypto Smart, Nigeria Strong’ initiative, designed to work with developers and stakeholders in shaping a framework for stablecoin regulation. SEC Director-General Emomotimi Agama disclosed that the commission is exploring the creation of a Naira-pegged stablecoin, backed by verifiable reserves and subject to independent audits, to be used for payments, cross-border trade, and programmable finance.