Kenya and Nigeria supercharge the era of decentralized finance.

Cryptocurrencies are leaping into the mainstream in Africa, potentially reshaping flows of capital for ambitious development. Major economies are catching up to this youth-powered wave of popularity. The latest is Kenya, which legalized digital currencies with passage of the Virtual Asset Service Providers Bill, signed into law by President William Ruto on October 15, 2025.

National Assembly Finance Committee Chairman Kuria Kimani said the step means “Kenya can be now the gateway into Africa” for digital money, noting that many young Kenyans already are trading, settling payments and investing using virtual assets.

Under the law, any company or person offering virtual asset services in or from Kenya must obtain a license from regulators that ensures the provider meets anti-money laundering, data privacy and consumer protection standards. The law “will create a transparent and secure environment for digital financial activities,” while safeguarding the public interest, “and attract investment in Kenya’s fast-evolving fintech landscape,” a parliamentary statement said.

In April, Nigeria officially recognized cryptocurrency assets as President Bola Ahmed Tinubu signed the Investments and Securities Act, which puts wildly popular crypto under the purview of securities regulators. The law is a “significant milestone” that aligns Nigeria with global best practices and market trends, said the accounting firm PwC. “With the new regulation, crowdfunding entities, collective investment schemes, and free trade zone entities can now raise funds from the public.” The Nigeria Securities and Exchange Commission, led by Emomotimi Agama, is trying to streamline oversight steps for fintech entrepreneurs in Africa’s leading cryptocurrency market through the Accelerated Regulatory Incubation Program.

Africa’s transformation

African politics and international development expert Paul Kaiser has watched the rise of cryptocurrencies in 2025 alongside the collapse of foreign aid and battles over tariffs – and thinks decentralized finance (DeFi) may be opening a new path for Africa’s social and economic transformation. Kaiser draws on deep experience in Africa as a former democracy and governance adviser for the U.S. government who also led national-level fiscal governance strengthening initiatives in Liberia and Zambia. He’s currently Lund Practitioner-in-Residence at Cornell University’s Mario Einaudi Center for International Studies and shares his thoughts:

In 2024, the Ethiopian Government’s Ethiopian Investment Holdings signed a deal that tech watchers pegged at USD 250 million with Hong Kong-based West Data Group’s Center Service Plc to initiate a bitcoin mining project, which has broken ground in southern Ethiopia. The plan? Use excess green energy from the Grand Ethiopian Renaissance Dam (GERD) – Africa’s largest – for bitcoin mining. That involves an energy-intensive grind by computers to earn Bitcoins by solving a complex mathematical problem. Revenue from this and other cryptocurrency mining deals would be used to build out local electricity transmission and distribution networks. Over time, the Ethiopian digital-money experts seek to shift electricity fed to digital mines to the power grid for underserved communities.

Other countries in Africa are pursuing similar plans, including Angola and the Democratic Republic of Congo. Is this a sound strategy for the continent? What are the risks and benefits to African governments and citizens as they come to terms with the proliferation of blockchain technology, DeFi and the increasing prominence of cryptocurrency trading?

Rising interest from young Africans in the cryptocurrency value chain comes at a pivotal and transitional time for international development. During the past year, the United States has dramatically scaled back its health, education, agriculture, climate and natural resources support and humanitarian aid throughout the world, with other “donor” countries pulling back, too.

Trump slashes aid

This policy pivot followed a sudden decision by the Trump Administration that the aid portfolio no longer served U.S. interests – indeed, in the tough rhetoric delivered by top officials including Secretary of State Marco Rubio, the six-decade commitment to developing-world aid ran counter to American interests. As a result, the north-south flow of official development assistance dwindled to a trickle. In sub-Saharan Africa, a focal region, U.S. programs worth about USD 15 billion ground to a halt.

This hit African countries that depended on aid for delivering essential services such as health care and education. In the Central African Republic, Niger and South Sudan, potential aid cuts could exceed 10 percent of government revenue, according to International Monetary Fund calculations. Ethiopia, Liberia and Malawi are close to the 10 percent threshold.

Communities that relied on funding from the global north are now struggling to do more with less as African governments try to fill the gaps. While some have leaned on a “trade, not aid” paradigm, this mantra rings hollow as higher tariffs erase tangible benefits for Africa – at least in the short-term. The expiration of a key American free-trade initiative, the African Growth and Opportunity Act, further erodes gains.

With weak currencies, unpredictable valuations and stubborn (though falling) inflation, along with inefficient, centralized public financial management, Africans are reaching for dependable access to finance. Blockchain, the engine of DeFi, is increasingly their platform of choice.

Blockchain is an open, digital technology that can record every financial transaction in a sequential block of exchanges. Think business ledger, only digital. Users of the same blockchain provide peer-to-peer oversight, making transactions across laptops and smart phones both secure and decentralized. This happens outside the control of banks and other financial institutions.

The blockchain gave birth to Bitcoin in 2008, and the subsequent proliferation of cryptocurrencies that Donald Trump himself touts. There are now thousands of these currencies available on online blockchain exchanges, with a global market capitalization of about USD 4 trillion, mostly in Bitcoin, according to Forbes. While some digital currencies, also called coins, are pegged to the U.S. dollar, most valuations are based on supply and demand stoked by technical credibility and consumer appeal.

Nigerian crypto surge

While sub-Saharan Africa is the smallest regional crypto economy, adoption has surged in 2025 – up 52 percent in the year from July 2024 to June 2025, to more than USD 205 billion. After passing USD 15 billion in monthly “on-chain” value in August 2024, volume jumped to almost USD 25 billion in March 2025, according to blockchain data provider Chainalysis, which credits the leap to a sudden currency devaluation in Nigeria. “Such devaluations typically drive volumes higher in two ways: more users move into crypto to hedge against inflation, and existing purchases appear larger in local currency terms as it takes more fiat to buy the same amount of crypto,” Chainanalysis said in a recent report.

Nigeria is by far Africa’s crypto king, with USD 92 billion in value recorded in the 12-month period, almost three times more than South Africa, the No. 2 market. Ethiopia, Kenya and Ghana round out the top five.

While tech-savvy youth, persistent inflation and forex shortages are driving the crypto boom, deeper factors also are at play. With high costs of entry and limited access, only 49 percent of adults in sub-Saharan Africa have a bank account, according to the World Bank. For years, Africans have used alternatives – credit unions, microfinance and informal, community-based savings and loan schemes. When mobile phones proliferated, Kenyans led the way with the click-and-send money transfer system M-Pesa. Financial access has improved, yet there’s far to go.

Across the continent, use of cryptocurrency stablecoins pegged to the U.S. dollar, such as USDT and USDC, has emerged to address currency volatility and limited access to dollars. This enables businesses and individuals to store value, facilitate international payments and support cross-border trade. South Africans and Nigerians are turning to crypto for paying bills, topping up mobile phone credit and making retail purchases.

Africa’s crypto boom, however, conceals a dark side: an international crime wave. Chinese cryptocurrency criminals were caught up in a massive Africa-wide dragnet involving law enforcement in Angola, Kenya, Senegal, Zambia and 14 other countries, Interpol revealed in August 2025. Operation Serengeti 2.0 led to arrests of 1,409 individuals and recovery of USD 97 million of almost a half-billion dollars in losses suffered by tens of thousands of victims.

These crimes are booming in Africa, according to a survey of Interpol member countries which found that cybercrime makes up 30 percent of all criminal activity in West Africa and East Africa. In Angola, Operation Serengeti dismantled 25 crypto mining centers where Interpol said Chinese nationals were illegally validating blockchain transactions to generate crypto. Billions of dollars are moving through crypto to cybercriminals involved in hacking, extortion, trafficking or scams, reckons Chainalysis.

International development gap

Africans have creatively repurposed blockchains and cryptocurrencies to address fintech gaps and weak economic fundamentals. But can crypto fill the gaps left by the global north’s retreat from international development?

The next generation of African entrepreneurs and thought leaders – conversant in blockchain – are going beyond conventional ways of moving money, doing business and supporting local development.

Volatile currencies, along with limited and uneven access to capital – both personal and borrowed – are driving African governments and businesses to more effectively use digital assets to generate wealth and promote socio-economic gains once buttressed by support from the global north. Cryptocurrencies and blockchains are putting new capital-raising tools into the hands of African change agents – just as African governments are waving goodbye to an era of generous aid from Washington.

(Cover image: Nigerian President Bola Ahmed Tinubu opens a highway project in Owerri, capital of Imo State, as the country links digital assets to future investments.)