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A Brief Overview on the History of Crypto in Nigeria

While many Nigerians began hearing about cryptocurrency in passing sometime around 2016 or 2017, the journey of digital assets in Nigeria started long before that. The adoption of crypto in Nigeria began silently in online communities such as underground blog forums and WhatsApp groups where early adopters whispered about Bitcoin as the “internet’s money”. This fringe interest soon became a survival tool as the Nigerian economy began its downslide plagued by inflation, unstable exchange rates, regulatory uncertainty and lack of adequate capital controls.

Bitcoin first caught serious attention during Nigeria's 2016–2017 economic recession. With the naira depreciating rapidly and banks tightening access to foreign exchange, crypto became more than a curiosity for most Nigerian Citizens; it became a necessity and an obvious source of income.

It was around this time that I first heard the word “Bitcoin” but misplaced it for “Beatcoin” from one of my classmates at the time who wanted us to invest part of our “pocket money” to buy a piece of BTC. (How I constantly wish I had bought and HODL back then…)

People began to see the loads of opportunities hidden in the digital finance space. Nigerians discovered that with nothing but a smartphone and an internet connection, they could make money irrespective of the inflation, and even bypass rigid banking systems and limitations attached to it.

Young people especially began trading BTC and other digital assets not just as an investment but as a means to receive payments for freelance work and even salary pay for those working for foreign companies. Digital assets were also used to fund business ventures and escape the dollar scarcity that plagued local banks at the time.


  • The Central Bank’s 2017 and 2021 Circulars

With the rapid growth of digital assets in the country and the increased adoption it received from Nigerians came scrutiny from governmental arms and agencies.

In 2017, the Central Bank of Nigeria (CBN) released its first circular warning banks and other financial institutions not to deal in virtual currencies. As if this was not enough, on February 2021, CBN made global headlines by issuing another directive, this time explicitly ordering banks to close accounts involved in crypto transactions.

Prior to this circular, Nigerians (just like me back then) were able to purchase and sell cryptocurrency directly using their Nigerian bank accounts through exchanges like LUNO, BINANCE, etc. I remember that in 2020, during the COVID, I had purchased $10 worth of LTC using LUNO. While making the payment directly through my Access Bank account.

The media quickly spread this as an absolute "ban" on cryptocurrency in Nigeria. Some even went as far as labelling it as a “crime”. However, the circular did not in any way criminalize crypto ownership or trading in Nigeria. It merely restricted traditional financial institutions from facilitating crypto-related payments.

So many banks in response to this flung into action by flagging and freezing several bank accounts whose owners were suspected of carrying out crypto transactions using these accounts. So many centralized exchanges which were just getting comfortable with the now-budding Nigerian crypto markets were affected deeply.


  • How Did Nigerians Respond?

Initially, this development was greeted with strokes of fear and there was panic as most Nigerians started looking for ways to sell of their digital assets and get their money safely back into their domestic bank accounts pending further future developments in the country. However, there was the problem of the broken bridge between the centralized exchanges and the Nigerian domestic banks.

This move disrupted centralized exchanges and forced many Nigerians to adopt peer-to-peer (P2P) trading models, which ironically led to an increase in crypto usage across the country. Therefore, rather than eliminate the trade of cryptocurrencies in Nigeria, it made the supply for these digital assets more problematic. Hence, there was a natural exponential rise in the price of these digital assets as against the Nigeria Naira and in turn more inflation as the value of Naira continued to plummet and the US dollar gained more momentum in its up trend. 

Instead of halting activity, the crackdown sparked new P2P platforms. Telegram and WhatsApp groups became informal trading hubs. Blockchain developers, DeFi users, crypto traders and NFT artists grew in number. Crypto adoption in Nigeria didn't decline at all, Nigerians merely adapted and evolved developing more innovative ways of performing crypto transactions.

Nigerians have consistently proven to be resilient tech adopters. According to a recent report by Crypto for Innovation, Nigeria ranks among the highest globally in crypto usage per capita. This increased grassroots interest in the digital asset market forced regulators to reconsider their earlier hardline stance.

In March 2025, a new shift occurred. As reported by African Business, Nigeria carried out its new intention to legalize cryptocurrency under the new Investments and Securities Act. The new ISA, in adopting and recognizing cryptocurrency and other digital assets as securities in Nigeria, is focused not just on financial innovation, but also on risk management and compliance.

What really fascinates me in these recent development is the pivotal transition in the position of the Nigerian government from outright condemnation to acceptance and desire for a regulatory structure. This just leaves the glaring question hanging;

Was the earlier circular by the CBN actually based on a well- informed and knowledgeable decision or was it just fueled from spite?

Well, it can be said that the earlier circulars released by the regulatory bodies was a means of educating the citizens on the dangers associated with the digital assets economy and to help safeguard citizens from falling into the hands of online scammers until proper and adequate regulations are put in place to control the sector. Hence the birth of the newly signed ISA 2025 and several other tax legislations such as the Finance Act 2023 which amended the Capital Gains Tax Act (CGTA); which are now gradually recognizing digital assets as securities under the Nigerian jurisprudence.

SOURCES:

1. https://cryptoforinnovation.org/crypto-in-nigeria-surge-in-adoption-and-regulatory-shifts/

2. https://cryptoforinnovation.org/crypto-in-nigeria-surge-in-adoption-and-regulatory-shifts/

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