Global consulting firm KPMG has urged Nigerian banks to adopt blockchain technology and collaborate with cryptocurrency firms to capitalize on the growing digital finance sector. The advisory comes as global crypto adoption rises and Nigerian regulators take steps toward structured engagement with the industry.
Key Insights from KPMG’s 2025 Report
In its March 2025 report, titled “Crypto Risk and Opportunities in Nigeria: A New Banking Paradigm”, KPMG assessed the impact of the Central Bank of Nigeria’s (CBN) 2021 ban on crypto transactions and the evolving financial landscape.
The report, citing data from Chainalysis, found that:
- The CBN ban had minimal impact on crypto adoption, as Nigerians continued to engage in digital asset transactions.
- Between July 2023 and June 2024, Sub-Saharan Africa recorded $125 billion in on-chain crypto transactions, with Nigeria contributing $59 billion.
- The high cost of traditional remittance services has pushed many Nigerians, including those in the diaspora, toward cryptocurrency for cheaper and faster cross-border transactions.
The Resilience of Nigeria’s Crypto Sector
Despite regulatory challenges, Nigeria’s crypto market demonstrated strong resilience, witnessing a 25% rebound in 2024. However, external factors such as:
- Banking penalties for CBN violations, and
- Currency devaluation,
…have influenced adoption trends.
At the same time, crypto-related fraud remains a significant concern. In 2024, global crypto scams accounted for $10 billion, fueled by high-yield investment frauds and pig-butchering schemes.
A Shift in Regulatory Approach
Recognizing the sector’s endurance, Nigerian regulators are shifting from outright restrictions to structured oversight. The introduction of:
- The CBN’s Virtual Asset Service Providers (VASPs) guidelines, and
- The Securities and Exchange Commission’s (SEC) Accelerated Regulatory Incubation Program (ARIP)
…marks a move toward clearer regulatory frameworks for digital assets.
Blockchain’s Transformative Potential for Banks
- KPMG emphasized that integrating blockchain analytics into banking compliance systems can:
- Enhance fraud detection and prevent illicit transactions.
- Improve operational efficiency in financial services. Expand banks’ capabilities in digital finance.
“Forward-thinking banks can position themselves at the forefront of an increasingly digital financial system by leveraging blockchain technology,” the report stated.
KPMG also highlighted that adopting blockchain innovations can boost Nigerian banks’ competitiveness in an evolving global economy.
What You Should Know
- The EFCC recently raised concerns about foreign nationals training young Nigerians in crypto-related fraud.
- The Chainalysis 2025 Crypto Crime Report revealed that illicit addresses received $178 billion in crypto transactions over five years.
- 2022 recorded the highest fraud-related crypto transactions at $54.3 billion, followed by 2023 ($46.1 billion) and 2024 ($40.9 billion).
As Nigeria navigates the intersection of finance and digital assets, the adoption of blockchain and regulatory clarity will play a crucial role in shaping the country’s financial future.
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