This article draws on and responds to a sponsored post published by BusinessDay Nigeria. Readers should note that some cited data originates from sources with a commercial interest in stablecoin adoption.

Nigeria received $92.1 billion in on-chain crypto value between July 2024 and June 2025, according to Chainalysis data. The country ranks second globally for crypto adoption, behind only India. Much of that activity is not speculative trading. It is commerce: small merchants, importers, exporters, and digital service providers using stablecoin rails to settle cross-border invoices, collect payments from diaspora customers, and protect working capital from a currency that has lost more than 75% of its value against the dollar since 2016.

USDT (Tether) dominates this activity. It accounts for roughly 88.5% of all stablecoin transactions in Nigeria, according to figures compiled by Breet.io from Chainalysis data. A Plasma Research survey cited in the Breet.io report found that, in one survey, 95% of Nigerians preferred receiving payments in stablecoins over the naira. Stablecoins now make up about 40% of total crypto activity in the country, a proportion that rose sharply during the naira devaluation episode of early 2025, when monthly on-chain volume spiked toward $25 billion and retail stablecoin inflows under $1 million surged to nearly $3 billion in a single quarter.

The Infrastructure Layer

Several regulated or licensed platforms are competing for this merchant segment. Yellow Card, which launched in Nigeria in 2019, has processed close to $6 billion in total volume there, with 99% tied to stablecoins. Ivorypay operates across 17 African countries with more than 16,000 merchants and over $500 million in total payment volume. It settles in Nigerian naira, USDT, USD, euros, and British pounds, and connects to mobile money networks including M-Pesa, MTN MoMo, and Airtel Money. Quidax and Busha received Nigeria's first provisional Virtual Asset Service Provider (VASP) licenses from the Securities and Exchange Commission in August 2024.

The SEC also operates an Accelerated Regulatory Incubation Program (ARIP), a sandbox pathway for VASPs not yet eligible for full registration. SMEs selecting platforms should understand that provisional licensing and ARIP participation represent distinct regulatory standings with different implications for which providers they can legally use.

The appeal for SMEs is practical. Traditional remittance corridors charge up to 8% per transaction. Crypto settlement is often faster and cheaper for cross-border payments. Approximately 36% of Nigerian adults are unbanked, yet smartphone penetration continues to grow, which means stablecoin wallets can reach customers and suppliers that conventional banking infrastructure does not.

What the Law Now Requires

The Investments and Securities Act (ISA) 2025, signed by President Bola Ahmed Tinubu in March 2025, formally classified digital assets as securities and placed the entire sector under SEC oversight. That shifted crypto from a gray area into a regulated industry with explicit compliance obligations.

For businesses accepting crypto payments, the practical requirements are significant. Merchants must process transactions through a licensed VASP or ensure their own gateway is compliant with the SEC's Digital Assets Rules under the Investments and Securities Act (ISA) 2025. Under the Nigeria Tax Administration Act (NTAA) 2025, which became fully enforceable in 2026, crypto receipts are taxed at the fiat equivalent of the transaction value. Tax-collection obligations fall on the platforms themselves. Merchants using third-party gateways also carry KYC record-keeping obligations, a compliance detail with direct operational implications for smaller businesses. A planned integration between the Federal Inland Revenue Service and VASP transaction data would mean on-chain activity flows directly to tax authorities, raising the stakes for accurate reporting across the entire payment chain. Non-compliance fines start at 10 million naira (approximately $6,693) for the first month and 1 million naira per month after that.

Capital requirements for digital assets exchanges and custodians are also escalating. Both exchanges and custodians must hold at least 2 billion naira (roughly $1.4 million) in minimum capital by June 30, 2027. In March 2026, the Central Bank of Nigeria formally permitted commercial banks to open accounts for SEC-licensed VASPs, a significant reversal from the 2021 banking ban.

"Nigeria's crypto ecosystem is at a pivot point," a West Africa Trade Hub regulatory analysis noted. "The regulatory scaffolding is now in place, but execution will determine whether innovation stays or leaves."

A Tension Worth Watching

Nigeria's regulatory model is already influencing other Sub-Saharan African markets. Ivorypay's X402 protocol, built with deep Nigerian roots, is now deployed continent-wide. Yellow Card's multi-country stablecoin rails similarly extend across Africa, reflecting infrastructure that has scaled from its early Nigerian operations. Sub-Saharan Africa's crypto market grew 52% year-over-year to $205 billion in 2025, with Nigeria accounting for 45% of the region's peer-to-peer transaction volume.

But the IMF's 2026 Article IV Consultation identified stablecoin adoption and what it called "digital dollarization" as significant monetary risks for Nigeria. When households and businesses systematically replace naira savings with USDT, the central bank loses traction over monetary policy, as the IMF warns. The same infrastructure that makes daily commerce more stable for individual Nigerians may simultaneously weaken central bank monetary transmission in ways the currency's own instability first made necessary.

With an estimated 28.7 million Nigerians projected to hold crypto by the end of 2026, that tension is not going away. Regulators, platforms, and the businesses adopting this infrastructure are now operating inside the same framework for the first time. Whether that framework holds will be determined in enforcement decisions made in the period leading up to the June 2027 minimum capital deadline and beyond.