KPMG has called on Nigerian banks to adopt blockchain technology and collaborate with crypto firms to maximize opportunities in digital finance. Their report highlights the resilience of the crypto sector in Nigeria and emphasizes the need for vigilance against scams. As regulators adapt, employing blockchain could significantly enhance banks’ operations and competitive standing in the digital economy.
KPMG has urged Nigerian financial institutions to adopt blockchain technology and collaborate with cryptocurrency firms, encouraging a shift away from overly cautious strategies to effectively engage with digital finance. This recommendation aligns with the global rise in cryptocurrency adoption and reflects changes in Nigerian regulatory bodies’ approaches towards the sector.
According to KPMG’s March 2025 report titled “Crypto Risk and Opportunities in Nigeria: A New Banking Paradigm,” the organization analyzed the repercussions of the Central Bank of Nigeria’s (CBN) 2021 prohibition on cryptocurrency transactions. The report revealed that the ban did not significantly reduce cryptocurrency usage, coinciding instead with an increase in Nigeria’s share of global crypto inflows.
Between July 2023 and June 2024, Sub-Saharan Africa witnessed $125 billion in on-chain crypto transactions, with Nigeria accounting for $59 billion of that total. High remittance costs in traditional banking have pushed Nigerians, including those residing abroad, towards cryptocurrency for more efficient and economical cross-border transactions.
Nigerian cryptocurrency inflows showed fluctuations over the years, but a notable 25% rebound in 2024 underscored the sector’s resilience. External factors, including penalties imposed on banks for breaching CBN regulations and currency devaluations, have also impacted adoption trends. Despite the growth, crypto-related scams remain a major concern, with $10 billion lost globally in 2024, predominantly from fraudulent schemes like pig-butchering and high-yield investment fraud.
KPMG emphasized the importance of vigilance in tackling these risks, as they provoke greater regulatory responses. In light of the sector’s resilience, Nigerian regulators have modified their strategies, introducing measures such as the CBN’s Virtual Asset Service Providers (VASPs) guidelines and the SEC’s Accelerated Regulatory Incubation Program (ARIP), signaling a move towards structured engagement with the sector.
The report highlights the transformative capacity of blockchain technology for Nigerian banks. By incorporating blockchain analytics into compliance systems, banks can enhance their capabilities in identifying illicit activities, improve operational efficiency, and explore new financial services. The report asserts that “forward-thinking banks can position themselves at the forefront of an increasingly digital financial system by leveraging blockchain technology,” thus enhancing their competitive edge in the dynamic digital economy.
In conclusion, KPMG’s report calls for Nigerian banks to embrace blockchain technology and establish partnerships with cryptocurrency firms as part of a proactive strategy to thrive in the evolving financial landscape. Despite challenges such as regulatory concerns and the prevalence of scams, the resilience of the cryptocurrency sector presents significant opportunities for growth and innovation. By adopting these technologies, Nigerian banks can enhance operational efficiencies and maintain competitiveness in an increasingly digital economy.
Original Source: nairametrics.com
