KPMG has called on Nigerian financial institutions to integrate blockchain technology and form partnerships with cryptocurrency firms, moving beyond cautious approaches to harness the opportunities of digital finance.
This recommendation comes as global cryptocurrency adoption rises and Nigerian regulatory bodies shift toward structured engagement with the sector.
In its March 2025 report, “Crypto Risk and Opportunities in Nigeria: A New Banking Paradigm,“ KPMG examined the impact of the Central Bank of Nigeria’s (CBN) 2021 ban on crypto transactions.
The report, citing data from Chainalysis, revealed that while the ban had little effect on curbing cryptocurrency use, it coincided with a significant increase in Nigeria’s share of global crypto inflows.
Between July 2023 and June 2024, Sub-Saharan Africa recorded $125 billion in on-chain crypto transactions, with Nigeria alone accounting for $59 billion.
High remittance costs in traditional banking systems have driven Nigerians, including those in the diaspora, toward cryptocurrency for faster and cheaper cross-border transactions.
Resilience of the sector
While Nigeria’s crypto inflows fluctuated in previous years, a robust 25% rebound in 2024 highlighted the resilience of the sector. External factors such as penalties imposed on banks violating CBN regulations and currency devaluations have also influenced adoption trends.
- Despite the sector’s growth, crypto-related scams remain a critical concern. In 2024, scams generated $10 billion globally, with the majority linked to schemes such as pig-butchering and high-yield investment fraud. KPMG stressed the importance of vigilance, as these risks continue to drive regulatory interventions.
- In response to the sector’s resilience, Nigerian regulators have adapted their strategies. Initiatives such as the CBN’s Virtual Asset Service Providers (VASPs) guidelines and the SEC’s Accelerated Regulatory Incubation Program (ARIP) mark a shift toward engagement and clearer regulatory frameworks.
KPMG emphasized the transformative potential of blockchain technology for Nigerian banks. By integrating blockchain analytics into compliance frameworks, banks can better detect illicit activities, improve operational efficiency, and expand into new financial services.
“Forward-thinking banks can position themselves at the forefront of an increasingly digital financial system by leveraging blockchain technology,” the report stated. KPMG underscored that such innovations can enhance competitiveness in the evolving digital economy.
What You Should Know
In a previous story by Nairametrics, fraudsters are becoming sophisticated in relation to crypto transactions.
- The EFCC raised an alarm that foreign nationals are training young Nigerians to engage in cryptocurrency fraud.
- According to the Chainalysis 2025 Crypto Crime Report released in February, over the past five years, illicit addresses received a staggering $178 billion in cryptocurrency value.
The year 2022 recorded the highest figure at $54.3 billion, followed by 2023 ($46.1 billion) and 2024 ($40.9 billion).
