KPMG has urged Nigerian financial institutions to adopt blockchain technology and work alongside cryptocurrency firms rather than distancing themselves.
In a March 2025 report titled ‘Crypto Risk and Opportunities in Nigeria: A New Banking Paradigm,’ KPMG examined the unintended effects of the Central Bank of Nigeria’s (CBN) 2021 ban on banks processing crypto transactions.
Referencing data from Chainalysis, KPMG said the ban did not deter crypto adoption in Nigeria. On the contrary, the country’s share of global crypto inflows has increased since 2021.
“Despite the CBN ban, Chainalysis publishes a study noting that Nigeria’s crypto transaction volume had a 9.0% year-on-year (YoY) growth rate, making it one of only six (6) countries to achieve YoY growth between June 2022 and July 2023,” the report said.
Additionally, the high costs associated with cross-border transactions via traditional finance channels may have driven many Nigerians (both domestic and in the diaspora) to leverage crypto for a faster and more cost-effective remittance alternative.
That said, crypto inflows into Nigeria declined in 2022 and 2023, though this was in line with global market trends rather than a direct result of the CBN’s ban.
“Local factors such as the fines amounting to ₦1.31B by CBN on six (6) commercial banks in Nigeria for reportedly contravening its circular on cryptocurrency in 2022 and then the devaluation of Naira in 2024 may have also impacted the adoption patterns,” reads the report.
Despite regulatory restrictions, peer-to-peer (P2P) trading thrived, solidifying Nigeria’s position as a leading crypto market. In December 2023, the CBN reversed its policy, permitting banks to provide services to licensed crypto firms.
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Since then, Nigeria has made several positive moves quickly becoming one of the crypto regulatory leaders in Africa, granting licenses to multiple digital asset firms in 2024.
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Consequently, KPMG noted that the recent move toward regulation and integration presents opportunities for both traditional banks and crypto firms.
By partnering with blockchain companies, banks can gain valuable exposure to cutting-edge technology and enhance their existing systems. The firm urged financial institutions to leverage blockchain’s advanced monitoring capabilities, which surpass traditional oversight methods.
“By integrating blockchain analytics into their compliance frameworks, forward-thinking banks and other financial institutions would enhance their ability to detect illicit finance, expand into new financial services, and position themselves at the forefront of an increasingly digital financial system.”
On the other hand, crypto exchanges can benefit from banks’ expertise in risk management, helping them improve financial integrity and strengthen anti-money laundering measures.
“The integration of traditional banking services with crypto firms creates a symbiotic cycle – banks gain exposure to technological innovation while bringing their institutional risk management expertise to the sector.”
Crypto Adoption in Nigeria in 2024 | 🇳🇬
Nigeria’s leading position in the Sub-Saharan Africa region is likely influenced by the populace’s use of crypto to combat economic challenges, as 85% of the total crypto value received by Nigeria’s local exchanges was through smaller… pic.twitter.com/ulztr6qhHY
— BitKE (@BitcoinKE) March 17, 2025
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