Stablecoins power Nigeria’s Web3 surge as startups hits $43m

Nigerian Web3 startups raised $43 million in 2025, more than double the $20 million recorded in 2024, as stablecoin-driven financial applications attracted the bulk of investor capital, according to the Nigeria Web3 Landscape Report 2025, released by Hashed Emergent.

Funding was heavily concentrated, with the finance segment accounting for 89 percent of total capital at $38 million, a fivefold jump year-on-year. The surge was driven largely by stablecoin-based solutions spanning payments, on/off-ramps, and business-to-business transactions.

“Nigeria’s momentum in Web3 has evolved beyond early adoption into a mature, utility-driven ecosystem,” said Tak Lee, chief executive officer of Hashed Emergent.

“With strong fundamentals across talent, stablecoin usage, and real-world applications, Nigeria is increasingly defining how the continent participates in the global Web3 economy,” he added.

Since 2020, more than 110 Nigerian-founded Web3 startups have raised over $170 million, underscoring steady ecosystem growth despite volatility in global crypto markets.

Stablecoins have become the backbone of financial activity within the ecosystem. According to the reports, deposits have grown by more than 9,000 percent between 2018 and 2025, with an 83 percent circulation ratio, indicating that most funds are actively used rather than stored.

Nigeria recorded $48.2 million in daily peer-to-peer (P2P) stablecoin transfers on centralised exchanges in 2025, the highest globally, highlighting strong demand for alternatives to traditional financial rails, particularly for cross-border payments and currency hedging.

On-chain value received in Nigeria rose 56 percent year-on-year to $92 billion, even as overall trading activity moderated after peaking in 2024. Fiat and crypto deposit and withdrawal volumes declined by as much as 49 percent, suggesting a slowdown in speculative trading.

However, this decline contrasts with continued growth in remittance-related flows, which are increasingly driven by stablecoins across African and global corridors. The divergence underscores a deeper transition in market behaviour from trading-led activity to utility-driven usage.

Investor behaviour is also shifting in response to market conditions. The report shows that nearly nine in ten Nigerian crypto users now hold both Bitcoin and stablecoins, reflecting a growing preference for more stable and liquid assets. Bitcoin accounted for as much as 89 percent of fiat-to-crypto purchases in 2025. This is the highest share across African markets, reinforcing its role as a store of value, while exposure to higher-risk altcoins remains limited.

Nigeria’s developer ecosystem continues to underpin the sector’s growth and global relevance. The country now accounts for 4 percent of global Web3 developers, the highest share in Africa, with the talent pool expanding by 36 percent year-on-year.

Developer activity is concentrated in key hubs such as Lagos, Jos, and Enugu but remains widely distributed across the country, reflecting a decentralised, remote-first work model. The talent base is also notably young, with about 73 percent aged between 18 and 27, while students account for roughly 40 percent of participants entering the ecosystem.

Solidity remains the dominant programming language, used by more than half of developers, while Rust is gaining traction, signalling growing interest in non-Ethereum virtual machine (non-EVM) ecosystems.

Despite this growth, structural gaps remain. About 53 percent of developers have not worked with global teams, while 35 percent consider compensation below international standards, raising concerns about long-term talent retention and competitiveness.

Outside finance, investment activity weakened, reflecting a more selective approach by investors. Infrastructure funding declined sharply to $4 million in 2025, while entertainment-related sectors attracted about $1 million, with activity largely concentrated in niche areas such as prediction markets and creator platforms.

The concentration of capital in finance highlights the sector’s immediate commercial appeal but also points to limited diversification within the broader Web3 ecosystem.

On the regulatory front, Nigeria recorded notable progress, though uncertainty remains. The Securities and Exchange Commission of Nigeria (SEC) formally recognised digital assets as securities under the Investment and Securities Act (ISA) 2025, extending oversight to exchanges, issuers, and service providers.

New tax rules also clarified the treatment of digital assets, including obligations around income tax, value-added tax, and cross-border transactions, providing a clearer framework for operators.

However, implementation has been uneven. Licensing processes under the SEC’s regulatory framework have been slow, with only a limited number of provisional approvals granted, while high capital requirements and overlapping regulatory mandates continue to pose challenges for startups.

The report also flags broader systemic risks, including the potential impact of crypto flows on monetary policy, foreign exchange stability, and anti-money laundering compliance.

Despite these challenges, the outlook for Nigeria’s Web3 ecosystem remains positive. The report projects continued expansion, supported by strong adoption trends, a growing developer base,e and increasing use of stablecoins in everyday transactions.

Stablecoins, in particular, are expected to remain central to the ecosystem’s evolution, as businesses and individuals rely on them for payments, remittances, and financial management.

“We wanted to go beyond surface-level narratives about growth,” said Uchenna Edeoga, who led the research. “This report highlights not just the progress being made, but also the opportunities, constraints, and signals that matter for the next phase of growth.”