KPMG has recommended that Nigerian banks integrate blockchain technology and partner with cryptocurrency firms to fully harness the opportunities presented by digital finance. Despite a 2021 ban, cryptocurrency use has grown, with Nigeria accounting for significant inflows in Sub-Saharan Africa. Regulatory changes aim to provide clearer frameworks, addressing challenges like scams and enhancing operational efficiency through blockchain.
KPMG has urged Nigerian banks to adopt blockchain technology and collaborate with cryptocurrency firms to take advantage of digital finance opportunities. This call is timely, given the rise in global cryptocurrency adoption and the evolving stance of Nigerian regulators toward this sector.
In its March 2025 report titled “Crypto Risk and Opportunities in Nigeria: A New Banking Paradigm,” KPMG analyzed the repercussions of the Central Bank of Nigeria’s (CBN) 2021 ban on crypto transactions. The report highlights that, contrary to expectations, the ban did not significantly reduce cryptocurrency usage, while Nigeria’s share of global crypto inflows surged.
From July 2023 to June 2024, Sub-Saharan Africa experienced $125 billion in on-chain crypto transactions, with Nigeria responsible for $59 billion. High remittance costs associated with traditional banking have prompted Nigerians, including those living abroad, to seek faster and more affordable cross-border transactions through cryptocurrencies.
The sector displayed notable resilience, showing a 25% recovery in 2024 after previous fluctuations. Factors such as penalties on non-compliant banks and currency devaluations have shaped crypto adoption patterns. Nonetheless, the increasing incidents of crypto-related scams pose significant risks, with KPMG noting that $10 billion in scams were recorded globally in 2024.
In response to the crypto landscape’s evolution, Nigerian regulatory bodies have begun to implement new frameworks, such as the CBN’s guidelines for Virtual Asset Service Providers (VASPs) and the SEC’s Accelerated Regulatory Incubation Program (ARIP), facilitating structured engagement with the cryptocurrency sector.
KPMG highlighted the potential benefits of blockchain technology for Nigerian banks, suggesting that the integration of blockchain analytics into compliance systems could enhance detection of illicit activities, operational efficiency, and open new avenues for financial services. The report advocates for proactive banks to seize the opportunities presented by technological advancements in the digital economy.
The call from KPMG for Nigerian banks to embrace blockchain and partner with cryptocurrency firms is timely and important amidst the rising global cryptocurrency trends. The analysis shows that despite regulatory challenges, the sector is resilient, and Nigerian banks can enhance their competitiveness while addressing the ongoing risks associated with scams. By leveraging blockchain technology, banks can transform their operations and better serve their clients, paving the way for innovation in the financial sector.
Original Source: nairametrics.com
