Nigeria, once a hotbed for cryptocurrency activity in Africa, is increasingly proving a hostile hunting ground for global crypto players having stifled local startups.
Global exchanges like Binance are facing regulatory hurdles, and OKX, the second-largest crypto exchange by trading volume, recently announced its exit from the Nigerian market altogether. This follows OKX's discontinuation of Naira peer-to-peer (P2P) transactions in May, mirroring similar moves by KuCoin the same month and Binance earlier, to appease state authorities that had blamed crypto P2P trading for accelerating the slide of the flailing naira.
Nigeria's crypto boom was fuelled by several factors. A young, tech-savvy population, coupled with limited access to traditional financial services and unfavourable economic prospects, made crypto an attractive proposition given the allure of quick profit-making in speculative trading.
Additionally, the depreciation of the Naira spurred interest in stablecoins, cryptocurrencies pegged to a stable asset like the US dollar, as a hedge against inflation. At the height of the buzz, swathes of local crypto startups and global players, and millions of dollars in investments, went all-in to capture the booming market.
But things aren’t quite as bubbly these days. Since late 2022, upheavals in the crypto market linked to bad actors and the resulting regulatory onslaught, as well as a capital drought, have quieted the frenzy. While this had initially manifested as local crypto startups running into trouble and struggling to survive, the shakeup is starting to unsettle global giants once keen on Nigeria.
