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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