Cryptocurrency Adoption and Its Implications for Financial Stability in Nigeria

This study investigates the complex relationship between cryptocurrency adoption and financial
stability in Nigeria, with a focus on youth and small business stakeholders. Employing a mixed-methods
research design, the study combines quantitative analysis of survey responses from 150 participants
(comprising university students, SME owners, and cryptocurrency traders) with qualitative insights from
15 in-depth interviews. The research examines key drivers of cryptocurrency adoption including
inflation hedging, remittance efficiency, and financial inclusion, while critically assessing associated
risks such as market volatility, capital flight, and regulatory challenges. The study reveal that 72% of
respondents under age 35 primarily utilize cryptocurrencies as an alternative to traditional banking
systems, particularly for cross-border transactions and wealth preservation amidst Nigeria's economic
instability. The study identifies significant policy tensions, demonstrating that restrictive measures like
the CBN's 2021 banking ban inadvertently increased peer-to-peer trading by 27%, exacerbating
monitoring challenges. Furthermore, the research evaluates the limited success of Nigeria's eNaira as a
regulatory alternative, with only 5% adoption rates among study participants. The study contributes to
financial technology discourse by providing timely insights for policymakers, financial institutions, and
academic scholars navigating the evolving landscape of decentralized finance in emerging markets.