KPMG has called on Nigerian financial institutions to integrate blockchain technology and collaborate with cryptocurrency firms, urging a shift away from cautious approaches to fully harness digital finance opportunities.
This recommendation comes amid rising global cryptocurrency adoption and evolving regulatory stances in Nigeria, signaling a shift toward structured engagement with the sector.
Impact of Nigeria’s Crypto Ban and Market Resilience
In its March 2025 report, "Crypto Risk and Opportunities in Nigeria: A New Banking Paradigm," KPMG analyzed the effects of the Central Bank of Nigeria’s (CBN) 2021 ban on crypto transactions. Citing Chainalysis data, the report found that while the ban did little to curb cryptocurrency use, it coincided with a significant rise 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. This surge was driven largely by the high remittance costs in traditional banking, prompting Nigerians—both local and in the diaspora—to turn to cryptocurrency for faster and cheaper cross-border transactions.
Despite fluctuations in previous years, Nigeria’s crypto inflows rebounded by 25% in 2024, highlighting the sector’s resilience. However, factors such as penalties on banks violating CBN regulations and currency devaluations have also influenced adoption trends.
Regulatory Shifts and Fraud Concerns
With crypto adoption growing, Nigerian regulators have adapted their strategies. New initiatives such as the CBN’s Virtual Asset Service Providers (VASPs) guidelines and the SEC’s Accelerated Regulatory Incubation Program (ARIP) reflect a move toward clearer regulatory frameworks and engagement with the crypto sector.
However, KPMG also highlighted crypto-related scams as a critical concern. In 2024 alone, global crypto scams generated $10 billion, with many linked to fraud schemes such as pig-butchering and high-yield investment scams.
The Economic and Financial Crimes Commission (EFCC) recently raised alarms over foreign nationals training young Nigerians in cryptocurrency fraud. According to the Chainalysis 2025 Crypto Crime Report, illicit addresses received a staggering $178 billion in cryptocurrency value over the past five years. The highest annual figures were recorded in:
- 2022 – $54.3 billion
- 2023 – $46.1 billion
- 2024 – $40.9 billion
The Role of Blockchain in Banking Transformation
KPMG emphasized the transformative potential of blockchain technology for Nigerian banks. By incorporating blockchain analytics into compliance frameworks, banks can:
- Detect illicit activities more effectively
- Enhance operational efficiency
- Expand into new financial services
According to the report, forward-thinking banks can position themselves at the forefront of the digital financial ecosystem by leveraging blockchain. KPMG underscored that such innovations would enhance their competitiveness in the evolving digital economy.