This is Follow the Money, our weekly series that unpacks the earnings, business, and scaling strategies of African fintechs, financial institutions, companies, and governments. A new edition drops every Monday.
Between July 2025 and June 2026, Nigeria’s cryptocurrency market shrank by 3% compared with the previous year.
But inflows into domestic exchanges almost tripled, rising by $4.13 billion to $6.22 billion, according to blockchain analytics firm Chainalysis, even as the country’s overall cryptocurrency market contracted by 3%.
Local exchanges accounted for 92% of the additional money flowing into cryptocurrency services, according to Chainalysis. Their share of centralised exchange inflows rose to approximately 50%, up from 27% in 2025 and just 7% in 2022.
The growth comes as Nigeria’s Securities and Exchange Commission (SEC), the capital market regulator, plans to raise the minimum capital requirement for digital asset exchanges (DAXs) from ₦500 million ($372,000) to ₦2 billion ($1.5 million).
Existing operators have until June 30, 2027, to comply, while companies seeking new registration have been required to meet the higher threshold since January 16, 2026. The rules give existing companies more time to raise money than those trying to enter the market.
The surge in cryptocurrency inflows comes as regulatory changes could favour established operators. Domestic exchanges now receive about half of Nigeria’s centralised exchange inflows, up from 7% in 2022. The market is growing, but a new entrant must raise four times the capital previously required to secure registration.
The SEC wants exchanges to have stronger financial buffers. But the requirement also means that a company trying to challenge established operators must first raise ₦2 billion ($1.5 million) without the customer base or trading activity those competitors have already built.
The boom happening inside a shrinking market
Nigeria received $38.1 billion in cryptocurrency activity between July 2025 and June 2026, making it sub-Saharan Africa’s second-largest crypto market after South Africa, according to Chainalysis.
Although total activity declined, cryptocurrency services recorded $25.2 billion in inflows, up 172% from four years earlier. Domestic exchanges accounted for $4.13 billion of the increase in the latest reporting period, bringing their total inflows to $6.22 billion from nearly $2.09 billion in 2025.
In its analysis, Chainalysis said domestic exchanges gained ground without a corresponding decline in inflows to other centralised exchanges.
Domestic exchanges captured 27% of centralised exchange inflows in 2025, receiving $2.09 billion out of an estimated $7.74 billion. Other exchanges accounted for the remaining $5.65 billion.
By 2026, domestic exchanges accounted for about half of inflows to centralised exchanges. Their $6.22 billion in receipts implies total inflows of about $12.44 billion, leaving a similar amount for other platforms.
Chainalysis reported that while both groups received more cryptocurrency, domestic exchanges accounted for nearly 90% of the growth. They gained market share in a business that was expanding, even as Nigeria’s wider cryptocurrency market contracted.
The growth also came during a difficult year for the global cryptocurrency industry. In July, CoinGecko, a global crypto research firm, said that the world’s ten largest centralised exchanges recorded a 28% decline in spot trading volumes in Q2 2026, as falling cryptocurrency prices weighed on trading activity, underscoring the pressure facing the broader exchange industry.
Nigerian exchanges were attracting more cryptocurrency at a time when decentralised exchange activity in the country fell 45%, and cross-border peer-to-peer (P2P) transfers declined 17%.
The growth also matters beyond cryptocurrency trading. In June, the International Monetary Fund (IMF) said Nigerian households and small businesses are using stablecoins to send money across borders, pay overseas suppliers, and hold dollar-denominated assets. The IMF noted that exchanges are part of the infrastructure connecting these transactions to the traditional financial system.
For exchanges, that creates business opportunities beyond customers speculating on cryptocurrency prices. People and businesses moving between naira and digital assets need platforms through which they can buy, sell, or convert their holdings. Exchanges that attract those customers can earn income from facilitating transactions.
However, the growth of domestic exchanges does not necessarily mean P2P is losing its place in Nigeria’s crypto market. Chainalysis ranked Nigeria first globally for domestic P2P activity in its 2026 adoption index, while recording $1 billion in smaller wallet-to-wallet transfers.
The two channels can serve different purposes: exchanges allow customers to buy and sell cryptocurrency, while personal wallets let them transfer it directly. For local operators, the opportunity may lie less in replacing P2P than in handling the transactions through which Nigerians enter and exit the crypto market.
The cost of competing
Nigeria’s new capital rules give existing exchanges an advantage that new competitors do not have: time.
In March, the SEC issued revised guidelines that allow companies with pending applications to submit plans for meeting the requirement by June 2027. However, applications that had remained unresolved for at least 12 months as of January 16 must be filed afresh under the new rules.
The capital must come from qualifying shareholders’ funds and retained earnings. For a company operating at the previous ₦500 million minimum ($372,000), compliance would require another ₦1.5 billion ($1.12 million) in qualifying capital.
Operators can choose to raise fresh funds, merge with other businesses, or seek approval to reduce their activities, according to the regulator.
The SEC said the higher requirement will strengthen financial resilience and investor protection. But the capital requirement also raises the cost of competing in a market where domestic exchanges are now controlling about half of centralised exchange inflows.
As of July 2026, about 14 companies operating in Nigeria had been admitted into the SEC’s Accelerated Regulatory Incubation Programme (ARIP), as the regulator attempts to monitor and test operational resilience.
Nigeria’s cryptocurrency market is becoming more dependent on domestic exchanges, giving regulators greater oversight of how digital assets move through the financial system. But the same rules intended to make these platforms safer could also limit who gets to operate them.
As more transactions move through exchanges, the ability to raise regulatory capital will matter alongside the ability to attract customers. The risk is that Nigeria could end up with a better-regulated crypto industry in which fewer businesses can afford to compete.
from TechCabal https://ift.tt/bQKosn1
via IFTTT
I am the CEO of 9JAGISTLAND.My name is Adedeji Timothy and my co-owner is Oyekola Damilare.This blog is born out of our passion to educating to people in all aspect of internet life.We are enthusiastic about writing posts and articles online.
Write your views on this post and share it. ConversionConversion EmoticonEmoticon