Similar to previous years, Sub-Saharan Africa has the smallest crypto economy of all regions, accounting for 2.3% of global transaction volume between July 2022 and June 2023. During that time period, the region received an estimated $117.1 billion in on-chain value.

Across the entire region during the time period studied, centralized exchanges are the most-used platform type, facilitating over half of all transaction volume. Sub-Saharan’s cryptocurrency market also appears more retail-driven than most, with a larger share of transaction volume coming in transactions under $1 million in value compared to most other regions.

Although Sub-Saharan Africa has consistently been one of the smallest cryptocurrency markets, a closer analysis reveals that crypto has penetrated key markets and become an important part of many residents’ day-to-day lives. As we’ll explore in more detail later, no country exemplifies this better than Nigeria, which ranks second overall on our Global Crypto Adoption Index and also leads the region in raw transaction volume.

Other countries in the region ranking high on the index include Kenya (21), Ghana (29), and South Africa (31). Keep reading to learn what drives crypto adoption in Sub-Saharan Africa and learn how recent regulatory developments have impacted local markets.

Citizens flock to Bitcoin and stablecoins to protect against inflation and debt

In no region is Bitcoin more dominant than Sub-Saharan Africa, as the world’s first cryptocurrency makes up a bigger share of transaction volume there than in any other region.

Why the disproportionate uptake of Bitcoin? It may be that Sub-Saharan Africa residents are turning to so-called digital gold for an alternative store of value. Many countries in the region have struggled with rising inflation and debt, making cryptocurrency an attractive means of storing value, preserving savings, and attaining greater financial freedom. In Ghana, for instance, inflation reached 29.8% in June 2022 after 13 consecutive months of increases — that marks its highest level in two decades. With relatively few financial opportunities, many Ghanians have turned to Bitcoin. Nigeria, Kenya, and South Africa have all faced similar problems in recent years, and all show a great deal of grassroots cryptocurrency adoption — that’s probably no coincidence.

However, experts on the ground tell us that some market participants have turned away from Bitcoin and towards stablecoins of late, as these generally see less price volatility than Bitcoin, whose price is well off all-time highs. Moyo Sodipo, Co-Founder and CPO of Nigeria-based cryptocurrency exchange Busha, provided some insight into this activity, stating, “When Busha gained popularity around 2019 and 2020, there was a big frenzy for Bitcoin. A lot of people were not initially keen on stablecoins. Now that Bitcoin has lost a lot of its value, there is a desire for diversification between Bitcoin and stablecoins. However, market shifts aren’t dampening activity. People are constantly looking for opportunities to hedge against the devaluation of the Naira and the persistent economic decline since COVID.”

Nigeria boasts the largest population and economy in Sub-Saharan Africa, and as discussed above, the largest cryptocurrency economy as well. Perhaps even more notable is that Nigeria’s crypto economy continues to grow despite market turmoil. In fact, Nigeria is one of only six countries in the top 50 by size globally whose crypto transaction volume grew year-over-year in the time period we studied. Its growth rate of 9.0% places it third among those six.

The evidence suggests crypto is one solution to Nigeria’s economic challenges. Since 2016, Nigeria has suffered from two major recessions, fueled by an unstable political situation, the COVID-19 pandemic, and the collapse of oil prices. Consequently, Nigerians of all ages are facing high unemployment — more than 20 million people were looking for jobs in 2021 — and many are up and moving to other countries.

The recent Naira crisis has exacerbated these issues. In 2022, the Central Bank of Nigeria announced its intentions to redesign the Naira and issue new notes in order to combat inflation and counterfeiting, as well as take more control over how much currency is circulating.

Unfortunately, the resulting cash shortage placed enormous pressure on the country’s unbanked population and triggered uncertainty regarding the use of old notes — all during an election period and a record high inflation rate of more than 20% at the beginning of 2023. Nigeria’s uncertain economic climate has encouraged many citizens to seek financial alternatives, increasing the value proposition of cryptocurrency.

These dynamics are reflected in the data. On the chart below, we can see that interest in Bitcoin and stablecoins has generally risen as the Naira’s value has decreased, particularly during the most recent extremely steep drops in June and July of 2023. The higher spikes around May and November of 2022, however, were likely driven more by users seeking to trade on the volatility spurred by TerraLuna and FTX’s collapses respectively, as opposed to the local economic situation.

At the same time, interest in altcoins has been growing across the region lately. Moyo Sodipo explained, “On days when the market tanks, we’ve also seen a buying frenzy. It depends on the dynamics of the market at that point in time. When there is a new memecoin, like Dogecoin or Shiba, there has also been a buying frenzy. Someone is always going to be interested in a token that seems like it could make you the next couple thousand dollars.” The below chart illustrates this increase in altcoin activity, as well as the proportionally large percentage of monthly stablecoin value.