Why crypto-loving Nigerians slashed their use of stablecoins by $14bn

In a sign Nigeria’s crypto crackdown is making an impact, stablecoin volume fell a whopping 38% in the 12 months ending in July, to $23.6 billion, according to a Chainalysis, a blockchain intelligence firm.

The sharp decline in Nigeria’s stablecoin utilisation flies in the face of the country’s ailing economy and devalued currency, the naira.

Nigerians, long big users of crypto, should be piling into dollar-backed stablecoins such as Tether’s USDT to safeguard their wealth.

Yet Nigeria’s bitter legal conflict with Binance and the clampdown on crypto exchanges appears to be dampening stablecoin usage.

Racketeering allegations

In February, Nigerian officials accused foreign crypto exchanges, including Binance, OKX, and KuCoin, of foreign exchange racketeering.

These platforms, especially their peer-to-peer services, were flagged for causing a 90% plunge in the naira’s value against the dollar.

Senior Nigerian officials alleged that swapping stablecoins for naira on those platforms was damaging the economy.