KPMG has called on Nigerian banks to adopt blockchain technology and form strategic partnerships with cryptocurrency firms, emphasizing the need to move beyond cautious regulatory approaches and harness the potential of digital finance.
This recommendation comes at a time when global cryptocurrency adoption is rising, and Nigerian financial regulators are transitioning toward a structured engagement with the crypto sector.
Cryptocurrency Growth Despite Regulatory Challenges
In its March 2025 report, titled “Crypto Risk and Opportunities in Nigeria: A New Banking Paradigm,” KPMG analyzed the impact of the Central Bank of Nigeria’s (CBN) 2021 ban on crypto transactions. The report, citing Chainalysis data, revealed that despite the ban, Nigeria’s cryptocurrency inflows surged significantly, demonstrating the resilience of the sector.
Between July 2023 and June 2024, Sub-Saharan Africa recorded a total of $125 billion in on-chain crypto transactions, with Nigeria alone accounting for $59 billion. Many Nigerians, particularly those in the diaspora, turned to crypto for remittances, as traditional banking systems continued to impose high transfer costs and slow processing times.
Despite fluctuations in Nigeria’s crypto inflows over the years, the sector rebounded strongly by 25% in 2024, further proving its resilience. However, KPMG warned of growing risks, citing a $10 billion global loss to crypto scams in 2024, mainly through fraudulent schemes such as pig-butchering and high-yield investment fraud.
Regulatory Shifts and Banking Innovation
Recognizing the continued growth of the sector, Nigerian regulators have begun adapting their approach. The CBN’s Virtual Asset Service Providers (VASPs) guidelines and the Securities and Exchange Commission’s (SEC) Accelerated Regulatory Incubation Program (ARIP) signal a shift toward greater regulatory clarity and structured engagement with the crypto industry.
KPMG emphasized that blockchain technology has transformative potential for Nigerian banks. By integrating blockchain analytics into compliance frameworks, banks can:
- Detect illicit activities more effectively,
- Enhance operational efficiency, and
- Expand their financial service offerings in the digital economy.
The report highlighted that banks willing to embrace these innovations would position themselves at the forefront of Nigeria’s evolving financial landscape.
The Future of Digital Finance in Nigeria
KPMG’s report underscores that blockchain and crypto partnerships are no longer optional but essential for banks looking to stay competitive in an increasingly digital financial system. The firm urged Nigerian financial institutions to take proactive steps in leveraging these technologies to enhance efficiency, security, and inclusivity in the financial sector.
With regulatory frameworks evolving and digital assets gaining mainstream adoption, the Nigerian banking sector faces a pivotal moment to integrate blockchain solutions and redefine its role in the future of global finance.
