KPMG calls for Nigerian banks to adopt blockchain and partner with crypto firms to exploit digital finance opportunities. The March 2025 report highlights Nigeria’s resilience in crypto despite a previous ban, noting substantial transaction volumes and challenges posed by fraud. Regulatory adaptations signal an emerging engagement with the crypto sector, emphasizing the transformative potential of blockchain for banks.
KPMG has urged Nigerian financial institutions to adopt blockchain technology and collaborate with cryptocurrency firms, advocating for a more proactive approach to digital finance. This recommendation aligns with the global surge in cryptocurrency adoption and the evolving stance of Nigerian regulatory bodies toward structured engagement in the sector.
In its March 2025 report titled “Crypto Risk and Opportunities in Nigeria: A New Banking Paradigm,” KPMG assessed the repercussions of the Central Bank of Nigeria’s (CBN) 2021 ban on crypto transactions. The report indicates that, according to Chainalysis, the ban had minimal effect on limiting cryptocurrency usage, which saw a substantial 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 contributing $59 billion. High remittance fees within traditional banking have propelled Nigerians, including those abroad, to opt for cryptocurrency due to its faster and cheaper cross-border transaction capabilities.
The resilience of the crypto sector in Nigeria is evident, particularly with a 25% rebound in 2024. External elements, such as penalties for banks breaching CBN regulations and currency depreciation, have significantly impacted adoption patterns. Nonetheless, the persistent threat of crypto-related scams remains a pressing concern, as $10 billion worth of scams were reported globally in 2024, predominantly involving schemes like pig-butchering and high-yield investments.
As the sector demonstrates resilience, Nigerian regulators have modified their approach. Initiatives such as the CBN’s Virtual Asset Service Providers (VASPs) guidelines and the SEC’s Accelerated Regulatory Incubation Program (ARIP) signify a transition toward engagement and the establishment of clearer regulatory frameworks.
KPMG highlighted the transformative potential of blockchain technology for Nigerian banks. By incorporating blockchain analytics into compliance systems, banks can enhance their ability to detect illicit activities, increase operational efficiency, and diversify their financial service offerings. The report stresses, “Forward-thinking banks can position themselves at the forefront of an increasingly digital financial system by leveraging blockchain technology,” thereby improving their competitiveness in the evolving digital economy.
In a previous report by Nairametrics, it was noted that fraudsters are becoming increasingly sophisticated concerning crypto transactions. The EFCC (Economic and Financial Crimes Commission) has raised concerns about foreign nationals training young Nigerians in cryptocurrency fraud tactics. According to the Chainalysis 2025 Crypto Crime Report, illicit addresses acquired a staggering $178 billion in cryptocurrency over the past five years, with 2022 witnessing the highest figure of $54.3 billion, followed by $46.1 billion in 2023 and $40.9 billion in 2024.
KPMG’s report emphasizes that Nigerian financial institutions should proactively adopt blockchain technology and engage with cryptocurrency firms to capitalize on the growing digital finance landscape. Despite challenges such as regulatory concerns and fraud, the resilience of the cryptocurrency sector and the adaptation of regulatory frameworks point to significant future opportunities for integration and innovation within the banking industry.
Original Source: nairametrics.com
