Banks Blocked Their Accounts—So They Built a Stablecoin Economy Instead

Key Takeaways

• Nigerians used stablecoins like USDt to replace the naira after the 2021 crypto ban.
• Peer-to-peer trading surged through Telegram, Yellow Card, and informal cash agents.
• The government lifted the ban in 2023, but stablecoin use had already become widespread.
• Crypto fills gaps in remittances, freelance work, and inflation-proof savings.

In 2021, Nigeria’s central bank (CBN) told financial institutions to avoid all crypto-related transactions and block crypto-related accounts. Despite the initial shock, Nigerians did not stop. 

Two years later, Nigeria became one of the most active countries in the world in terms of digital asset adoption. How did this happen?

Nigeria faces persistent naira inflation, high banking fees, poor access to financial services and limited technology infrastructure. 

When the ban took effect, many Nigerians were already trading and earning in crypto, getting paid for freelance work, sending money home, or using stablecoins for savings. 

According to the International Monetary Fund, Nigeria’s inflation reached 26.5 percent in 2025. 

With rising national problems affecting the population and stability, such as unemployment, inflation, food insecurity, corruption, and political instability,  the youngest generation saw crypto as a way to earn, work, and participate in the global digital economy.

Nigeria is a leading and necessity-driven example of crypto adoption. Despite the obstacles, it shows how economic pressure, limited financial access, and youth demand can push digital assets into everyday use.

This article explains how Nigerians built a crypto economy after the 2021 banking ban on digital assets. It covers the causes, key challenges, the rise and importance of peer-to-peer (P2P) trading, and how USDt, a stablecoin tied to the U.S. dollar, is increasingly used as an alternative to the naira for savings and payments.

Nigeria’s Problem: Inflation, Bank Bans, and Economic Uncertainty

A large part of Nigeria’s population remains outside the banking system. In 2023, 32% of adults, or around 33.9 million people, still had no access to formal financial services. 

Banking the unbanked in Nigeria is not just a crypto motto. It reflects a real economic need.

However, Nigeria’s 2021 ban was strict, and the effects came quickly. It targeted the growing number of people using digital assets for income, savings, remittances, and business: a large group that was finally gaining access to a financial system that allowed them to participate.

In the ban announcement, the CBN described crypto as carrying “significant risks that transacting in cryptocurrencies portend, including loss of investments, money laundering, terrorism financing, illicit fund flows and criminal activities.”

The ban blocked all connections between crypto users and the banking system. Users lost access to the tools they needed to trade, save, or receive payments. These were some of the consequences:

• Banks blocked transfers from personal accounts to crypto exchanges.
• Exchanges stopped withdrawals into Naira accounts.
• Payment processors disabled card purchases for crypto.
• Institutions froze or shut down accounts flagged for crypto use.

The crypto ban hit hard. 

• Freelancers lost access to international clients paying in crypto.
• Small businesses could not accept digital payments from abroad.
• Families stopped receiving remittances sent through digital assets.
• Startups and apps were forced to pause or shut down operations.

Most of the progress came from mobile tools and fintech solutions, supported by rising mobile internet service penetration.

The Rise of the Stablecoin Workaround

People moved to chat apps like Telegram, Discord, and WhatsApp to exchange information. Platforms like Remitano and Paxful (which closed in 2023) helped users connect and trade directly.

Others met with local agents in person to swap cash for crypto, often choosing USDt as a safer store of value.

The government’s attempt to offer a digital solution, the eNaira , a Central Bank Digital Currency (CBDC), has seen slow adoption , failing to build trust or traction.

Instead, stablecoins took the lead. USDt became the digital dollar locals could trust. People used it to save money, get paid, and send funds across borders without relying on the naira.

As P2P trading grew, new platforms stepped in to support stablecoin activity. Here are some of the main ones:

• Yellow Card: This leading pan-African platform serves 20 countries, making buying and selling USDt easy using local currency. It operates with full approval in Nigeria and builds trust by offering simple tools and transparent pricing.
• Binance P2P: In Nigeria, Binance P2P platform faced pressure and was reportedly restricted due to FX and KYC concerns.
• Crane: This local fintech platform offers cryptocurrency conversions to and allows stablecoin transfers. It helps people send and receive USDt quickly through mobile channels, making it popular for both savings and small business payments.

Why Nigerians Choose USDt

For many Nigerians, USDt became the most practical option during financial uncertainty. It held value better than the naira and offered other clear advantages over both the naira and other cryptocurrencies.

• Easy conversion: Users could quickly swap USDt for cash or other crypto without barriers.
• Global acceptance: Freelancers, families, and traders relied on it for everyday and cross-border payments, avoiding bank delays and high transaction fees.
• Price stability: USDt can hold its value while the naira has increasingly lost its purchasing power, and other cryptocurrencies are more volatile. Users can protect their earnings from inflation.
• Paying rent and invoices: Tenants and business owners can use USDt through P2P networks to settle bills.
• On-ramping with cash: Mobile agents and local vendors can help users to buy USDt directly with physical cash.

Legality and the Quiet Normalization

Eventually, the CBN lifted restrictions on the use of virtual assets, announcing new licensing rules in December 2023. It provided strict guidelines instead of offering full support.

Only licensed firms registered with the Securities and Exchange Commission  (SEC) could interact with banks. 

These firms had to follow strong Know Your Customer (KYC) and Anti-Money Laundering (AML) rules. Banks were still banned from trading or holding cryptocurrencies themselves. 

Official policy caught up two years too late. The new rules showed that the government could not ignore the shift; Nigerians were into crypto and the government did not want to lose control. 

Despite official restrictions, crypto activity persists and is increasing. 

Nigeria stands out in West Africa with a top-tier score, making it #2 globally, according to Chainalysis. It is followed by Ethiopia #26), Kenya #28, and South Africa #30.

Has Nigeria’s Crypto Policy Really Changed?

The CBN spent years pushing crypto activity to the margins. However, as crypto adoption grows in Nigeria, the government signals a shift in its approach.

The CBN moved from cutting off access to defining how crypto firms could operate. It introduced identity verification, consumer protection, and registration rules, among others, bringing digital assets under formal regulation.

These steps signaled a policy shift.

In early 2024, it approved the rollout of cNGN, a naira-backed stablecoin. It was introduced to offer a stable, digital version of the naira with real market use. The goal is to support payments, encourage adoption, and bring crypto activity into a regulated space.

Unlike the eNaira, which is fully government-controlled, the cNGN is issued by the Africa Stablecoin Consortium (ASC), a group of licensed fintech firms. 

In 2025, the new Investments and Securities Act gave the SEC authority to regulate digital assets, including stablecoins. 

• Platforms that offer trading, custody, or token issuance must now register with the SEC. 
• They are required to follow investor protection rules, file reports, and stay compliant with financial laws. 
• The SEC also introduced a fast-track licensing program to bring more firms into the legal framework. 
• Virtual assets are now treated like formal financial products. 
• Companies must register, report operations, follow investor protection rules, and maintain transparent internal governance. 

Some must undergo audits or submit compliance documentation depending on their service type.

What This Means for Everyday Nigerians

In Nigeria, people without bank accounts can access digital money through their phones or peer groups. 

Students and freelancers can use stablecoins to receive payments from abroad. 

Vendors and remittance agents build new services around the USDt. Cryptocurrency can fill the gap in deprived areas where banks fail to reach.

But this system also carries risks. For example:

• Scams: These are common in informal trading groups, including social media platforms and there is no easy way to recover lost funds. 
• Regulation is in development: Tax and anti-money laundering rules remain unclear. 
• Protection remains limited: Most users rely on unregulated platforms, which offer little help in fraud or technical failure cases.

For now, stablecoins offer access and the stability that the naira lacks. But without proper safeguards, they do not offer real protection. Without strong government support, Nigerians are left to manage the risks on their own.

Beyond Nigeria: A Blueprint for Other Economies?

The crypto phenomenon in Nigeria is not unique. In countries facing inflation, capital controls, and limited banking access, people are turning to digital currencies out of necessity. 

Argentina, Lebanon, Turkey, and Zimbabwe are already part of this shift, and the list keeps growing. When local currencies fail to hold value or move across borders, users find alternatives that work. 

Nigeria shows how crypto can become part of daily life, even in a country with uneven access to reliable infrastructure.

Conclusion

Nigeria’s example shows how necessity leads to alternatives and innovation. After the 2021 banking ban, stablecoins filled a growing financial gap in the country, especially USDt. 

Freelancers, students and small businesses turned to peer-to-peer trading, replacing the naira in everyday life. Platforms like Yellow Card and Crane became local gateways for storing value, sending remittances, and avoiding high banking costs.

Despite regulatory shifts in 2023 and 2024, stablecoins remain a strong alternative. The cNGN launch marks a formal effort to catch up, but it may be too late for full control. 

Nigeria’s case proves that grassroots crypto adoption can thrive even when blocked by policy and limited technological infrastructure, making it a model for other struggling economies

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