The Nigerian Government’s Crypto Crackdown and the Role of USDT

February 29, 2024

In the last couple of weeks, Nigeria has found itself at the centre of a currency crisis, with the value of the Naira drastically falling against the US Dollar.

Amidst this economic turmoil, recall that at the beginning of the year, the value of the Naira to Dollar was between N900 and N1,100 to $1, however, the Naira now goes for N1,600 to $1. This issue has raised a lot of concerns for the Nigerian government.

In a bid to safeguard the Naira and tidy up the multiple systems of various exchange rates, the government has restricted access to some of the largest exchanges in the region and pointed fingers at cryptocurrency and the popular digital US Dollar (Tether USDT) stablecoin as culprits for exacerbating the situation. These accusations have led to a series of restrictive measures aimed at curbing access to cryptocurrencies and digital asset exchanges.

USDT Dragged into the Fray

The blame game surrounding the depreciation of the Naira has roped in USDT, a stablecoin pegged to the value of the US Dollar. Nigerian authorities allege that the increasing conversion of Naira to USDT, particularly as a hedge against inflation, is contributing to the currency’s devaluation. This narrative has unknowingly sparked scepticism and scrutiny around USDT’s role in the Nigerian economic landscape.

Tether is a cryptocurrency stablecoin, launched by the company Tether Limited Inc. in 2014 with a current market cap of $97.81B USD. While USDT’s involvement in Nigeria’s currency crisis has come under scrutiny, it’s essential to understand the various legitimate use cases of this stablecoin which include:

Various Use Cases of USDT

Hedging Against Inflation: In economies experiencing high inflation rates, such as Nigeria, USDT provides a stable alternative to volatile local currencies. Investors often convert their assets into USDT to shield themselves from the adverse effects of inflation.

Remittances and Cross-Border Payments: USDT facilitates seamless and cost-effective cross-border transactions. Nigerian expatriates and businesses can use USDT to send and receive funds internationally without being subjected to exorbitant fees or lengthy processing times associated with traditional banking systems. Likewise students schooling abroad, USDT serves as a fast safe and effective way to preserve the value of their fees and allowances.

Trading and Investment: USDT serves as a bridge between fiat and cryptocurrencies in the global digital asset markets. Traders and investors utilize USDT as a safe haven during periods of market volatility, allowing them to swiftly enter and exit positions without exposure to fiat currency risks.

Access to Decentralized Finance (DeFi): USDT plays a pivotal role in the burgeoning decentralized finance ecosystem, enabling users to participate in various DeFi protocols such as lending, borrowing, and yield farming. This accessibility empowers individuals to engage in financial activities traditionally reserved for institutional players.


The Nigerian government’s crackdown on cryptocurrency exchanges and the restriction of access to USDT reflect a broader global debate surrounding the regulation and adoption of digital assets. While concerns over currency speculation and financial stability are valid, it’s important to acknowledge the legitimate use cases of stablecoins like USDT in facilitating financial inclusion and innovation.

As the landscape of finance continues to evolve, policymakers must strike a balance between regulatory oversight and fostering technological advancement for the benefit of all stakeholders.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

Leave a Reply

Dangote Cement Stocks
Previous Story

Dangote Cement Wins Environmental Sustainability Award

NGX investors
Next Story

NGX Falls by 1.27% as Traders ‘Protest’ CBN Rate Hike

Latest from Economy

Don't Miss