On a humid afternoon in Nigeria’s commercial capital, Lagos, a young trader in electronics pulls out his phone and opens Binance, the world’s largest cryptocurrency trading platform by trading volume. He’s not monitoring the Bitcoin market or chasing the next crypto craze. He’s paying a supplier in the Chinese port city of Guangzhou for 500 smartphones.
Like numerous other traders at the Lagos Computer Village, he has a Binance digital wallet to store, send and receive cryptocurrency pegged to the US dollar (USDT). Within minutes, his payment lands in China. His supplier confirms. The phones will ship tomorrow.
Five years ago, this transaction would have been nearly impossible. The Lagos phone buyer would have had to queue at the nearby commercial bank; fill out forms for foreign exchange; and wait as long as 7-21 days for clearance. On top of that, there was no guarantee of foreign exchange approval being granted. The other alternative was turning to the black markets, which attract exorbitant rates.
Now? Welcome to Nigeria’s quiet cryptocurrency revolution. He taps his screen a few times. Done.
Developing countries are recording high cryptocurrency adoption rates surpassing more advanced economies. Nigeria stands out, with one of the highest rates of crypto adoption globally. But the reasons aren’t clear.
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The focus of my scholarly research is digital innovation and entrepreneurship. My co-researcher and I sought to examine cryptocurrency adoption and diffusion and its use for cross-border payments in the Nigerian context. We took a case study approach. Data collection involved two rounds of interviews with retailers from Nigeria, suppliers from China, informal exchangers, crypto brokers, and mediators.
One might think cryptocurrency’s appeal lies in its technology: decentralisation, the fact that it cannot be altered once recorded, all that. But our research found something else. Crypto works in Nigeria because of human networks of trust.
We have evidence to suggest that crypto adoption and diffusion in this context occurs through:
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a reinforcing process of technology transformation, adoption and use
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a strong coalition of the interests of diverse actors
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a dynamic relationship between the technical elements of crypto and contextual political, economic, social, technological, legal, environmental influences.
Insights from the study might be useful for addressing adoption challenges and designing inclusive financial systems in similar contexts.
Meet the crypto brokers
Located in the capital of Lagos State, south-western Nigeria, the Computer Village hosts over 5,000 informal micro, small and medium enterprises. It is billed as Africa’s largest market for information and communication technology accessories. This was the focal point of our case study.
We interviewed retailers importing from China, the crypto brokers who help them, Chinese suppliers, and the network of intermediaries who make it all work. What emerged was a sophisticated parallel financial system processing millions monthly, built entirely outside traditional banking. Between July 2023 and June 2024, Nigeria is estimated to have processed US$59 billion in crypto transaction value, up to 85% of it from retail trade.
Here’s how it works in three quick steps lasting less than an hour:
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A crypto broker sits in a small office near the market. Retailers call in with the local currency, naira.
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The naira is converted into USDT using peer-to-peer exchanges; the stablecoin is sent to contacts in China.
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These Chinese traders convert USDT to yuan and pay the supplier directly.
One broker told us:
Retailers don’t need to understand blockchain. That’s my job. They just know their supplier gets paid fast, and they save money.
Crypto brokers charge lower fees than banks or Western Union. But speed matters even more than cost. In Nigeria’s volatile economy, prices can shift overnight. A delayed payment might mean your supplier raises prices or your goods arrive after competitors have restocked. Crypto eliminates that risk.
These brokers didn’t emerge from fintech accelerators or venture capital. Many were young tech-savvy relatives of traders who saw a problem and built a solution. They positioned themselves as indispensable – the only way to get past Nigeria’s restricted financial system and and do global trade.
Brokers guarantee payments personally. If something goes wrong, they cover losses from their own pockets to maintain reputation. One broker told us he absorbed a ₦2 million loss (about US$2,500) when a Chinese intermediary disappeared with funds. Retailers recommend brokers to fellow traders in the tight-knit market community. Chinese crypto traders work only with verified contacts, often through elaborate referral systems.
Cryptocurrency here doesn’t replace human relationships. It’s technology that enables and extends existing trust networks, letting them operate at global scale.
The infrastructure of resilience
The system relies on more than just brokers and goodwill. Stablecoins like USDT solve volatility. Mobile wallets work on basic smartphones. QR codes enable transactions even when internet is patchy. Peer-to-peer exchanges bypass bank restrictions legally. Nigeria’s central bank had banned banks from crypto transactions since 2021 but reversed its decision in 2023, citing global regulatory trends.
When suppliers in China initially refused to accept cryptocurrency, brokers enrolled Chinese crypto traders as intermediaries. These traders buy USDT from Nigerian brokers (often at slight discounts, giving them profit), convert it to yuan, and pay suppliers through conventional Chinese banking. The supplier never touches crypto. They just receive payment.
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This is innovation through adaptation. It is not building a perfect system from scratch, but cobbling together solutions from available pieces until something works.
Computer Village itself plays a role. Concentrated markets create information flow. Success stories spread fast. A trader mentions his broker completed a payment in 20 minutes, and suddenly five more retailers want introductions. Physical proximity accelerates network growth in ways digital advertising never could.
What happens when the state pushes back
In 2021, Nigeria’s central bank ordered commercial banks to close accounts dealing with cryptocurrency. The government worried about speculation, money laundering and capital flight. This sounded the death knell for crypto in Nigeria.
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Instead, the network adapted. Brokers shifted to peer-to-peer platforms. Over-the-counter exchangers (informal traders who swap crypto for cash) expanded operations. Transaction volumes continued to grow.
What this means for Africa and beyond
Nigeria isn’t alone. Similar patterns appear across developing economies – Kenya, Ghana, Vietnam, India. Wherever formal financial systems strain under inflation, currency controls or institutional weakness, cryptocurrency fills gaps.
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This isn’t speculation. Traders are using stablecoins as dollar-equivalent tokens that move faster and cheaper than wire transfers.
It’s also not “banking the unbanked” in the usual sense. Many of these traders have bank accounts. Banks just can’t provide what they need: rapid, affordable, reliable cross-border payments.
For policymakers, the lesson should be humbling. You can’t ban away an innovation that solves real problems. When formal institutions fail to serve economic needs, informal systems emerge. The question is whether governments will learn from these systems or simply fight them.
Mayowa Joy David contributed to the research on which this article is based.
Atta Addo does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
