Nigeria's $24B Stablecoin Boom Threatened by Regulatory Stance
Nigeria, Africa's top stablecoin market, has seen a surge in stablecoin trading, with $24 billion transacted in 2024. USDT leads the pack, favoured by importers, freelancers, and investors seeking stability and cost-efficiency. However, Nigerian regulators' stance threatens progress.
Industry experts advocate for risk-based regulation to acknowledge stablecoins' legitimate economic roles. Despite this, Nigerian regulators still view stablecoins like USDT as violations under the Foreign Exchange Act.
Nigeria's crypto adoption ranks second globally, driven by tech-savvy youth and the need for financial alternatives. Stablecoins, due to their stability and speed, have become preferred for payments and investments, surpassing Bitcoin in Q1 2024 with nearly $3 billion in transfer value.
The Central Bank of Nigeria (CBN) lifted its ban on crypto-related transactions in December 2023, boosting stablecoin trading. The Nigerian National Assembly and regulatory authorities like the CBN are involved in shaping laws to regulate stablecoins.
Nigeria's stablecoin market, led by USDT, has grown significantly, driven by inflation hedging and cross-border commerce. While investors and users benefit from stablecoins' stability and speed, regulatory clarity is needed to ensure sustainable growth. Industry experts urge a nuanced, risk-based approach to recognize stablecoins' legitimate roles.
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