Nigeria’s crypto boom masks wealth flight as billions flow offshore

Nigeria’s cryptocurrency market is booming, but the country is barely reaping the benefits. Despite being one of the world’s top crypto adopters, most of the value created by this surge flows offshore through foreign exchanges and blockchain networks.

Between July 2023 and June 2024, Nigeria recorded about $59 billion in crypto transaction value, according to a report by Breet, making it the second-largest crypto economy globally, behind only India.

By 2025, an estimated 22 million Nigerians, roughly 10.3 percent of the population, own or use cryptocurrencies, compared to just 0.4 percent a decade ago. Stablecoins, which are pegged to the U.S. dollar, have become especially popular as the naira continues to depreciate. These dollar-linked assets now account for 43 percent of retail transactions under $1 million, offering ordinary citizens a hedge against inflation and currency instability.

Yet while usage is soaring, the gains are not staying at home. Much of the trading happens on foreign platforms like Binance, Tron, and Polygon, where transaction fees, liquidity, and custody services benefit other economies instead of Nigeria’s.

Industry stakeholders call this a modern version of the resource curse, where the country exports digital value but retains little domestic wealth.

“We trade a lot. Nigeria is one of the largest crypto markets in the world. So the question is, where is all that money going? How can the government make money from the huge transactions happening in this industry?” Ade Atobatele, a technology entrepreneur and startup mentor, asked, in an interview with BusinessDay.

Atobatele believes that the problem lies not in the level of crypto adoption, but in policy misalignment between Nigeria’s two key financial regulators, the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC).

“The SEC is trying to bring crypto and stablecoins into the mainstream market. But the CBN controls the naira, and it has directed banks not to open accounts for crypto-related businesses. Until both institutions sit down and agree on how to work together, meaningful progress cannot be achieved,” he explained.

He noted that Dr. Emomotimi Agama, director-general, SEC, has already proposed setting up a joint committee with the CBN to harmonize policies and create a unified national framework for digital assets. “Once that happens, Nigeria can start tapping into the enormous tax and revenue potential of the digital asset economy,” Atobatele said.

Agama has repeatedly emphasized that the SEC views blockchain technology as a tool for market development, not just speculation. In a 2025 policy paper, he warned that Nigerians have lost about N1 trillion ($600 million) to crypto-related Ponzi schemes over the last 25 years, urging regulators to adopt activity-based rules for stablecoins to foster trust and transparency.

Atobatele agrees that regulation must precede monetization, citing the evolution of mobile money and fintech platforms as a model.

“About 12 years ago, there was no such thing as OPay or mobile money. It was when the government introduced regulations that people began to understand the rules. That is what democratized the space. The same thing can happen with crypto once proper rules are in place,” he said.

Atobatele therefore warned that time is running out, stating, “The government wants to make money from the sector, but both arms—the SEC and the CBN—must first align. Once there is harmony, regulation, taxation, and investor confidence will follow. We can’t continue to lose out on a multi-billion-dollar market. If we localize the right policies, Nigeria stands to gain immensely from this digital revolution.”

Industry players like Michael Emeeka, country gead of Blockchain.com Nigeria, shared his view with BusinessDay, arguing that the government integrating cryptocurrency into its upcoming tax reform, would help capture revenue from digital transactions. “The SEC should engage regularly with industry stakeholders to create a regulatory framework that balances innovation with investor protection,” he said.

An analyst who is familiar with the issue warned that unless the government builds local infrastructure, such as Nigerian-owned exchanges, custodial wallets, and asset tokenization systems, the economic leak will continue.

He noted that Nigeria’s crypto volume, estimated at about $400 billion annually or $33 billion monthly, exceeds the nation’s total foreign reserves and is nearly three times higher than the GDP figure reported by the National Bureau of Statistics (NBS).

He, however, cautioned that these are gross volumes rather than real value, as most of the money flows out to foreign platforms, with very little retained domestically.

“Nigeria must act fast but smart. With the SEC licensing exchanges and the U.S. legalizing crypto, it is time to build, not just trade. We need to own the infrastructure. We cannot keep enriching foreign exchanges. Let us build Nigerian-owned wallets, blockchains, and exchanges,” he advised.

He also called for the tokenization of real assets, from land to diaspora remittances, backed by tangible Nigerian value, commending SEC’s Agama for his leadership in pushing for local blockchain innovation. “Crypto must not just pass through Nigeria; it must build Nigeria,” he stressed.

The analyst further urged investment in public education to help citizens and policymakers understand digital assets beyond speculation. “We cannot continue to act in suspicion while the train is moving. Skepticism is not out of place, but while doing that, we must hold strong to the rail not to lose out. We must work together to enjoy the value this brings,” he said.