KPMG Advocates for Blockchain Integration and Crypto Partnerships in Nigeria

KPMG recommends that Nigerian banks integrate blockchain technology and collaborate with cryptocurrency firms to harness digital finance opportunities amid rising global cryptocurrency adoption. The firm’s report reviews the impact of the CBN’s 2021 crypto ban and highlights Nigeria’s significant share in global crypto inflows, underscoring the sector’s resilience despite risks associated with scams and regulatory changes.

KPMG has advised Nigerian financial institutions to adopt blockchain technology and collaborate with cryptocurrency firms, urging them to transcend traditional cautious approaches to leverage opportunities in digital finance. This recommendation comes amid increasing global cryptocurrency adoption and a shift in Nigerian regulatory bodies towards structured engagement with the sector.

In its report titled “Crypto Risk and Opportunities in Nigeria: A New Banking Paradigm,” published in March 2025, KPMG analyzed the effects of the Central Bank of Nigeria’s (CBN) 2021 ban on crypto transactions. The findings revealed that while the ban did not significantly curb cryptocurrency usage, Nigeria’s share of global crypto inflows saw a notable increase following its implementation. From July 2023 to June 2024, Sub-Saharan Africa experienced $125 billion in on-chain crypto transactions, with Nigeria contributing $59 billion.

The high costs associated with traditional remittance methods have prompted Nigerians, including those living abroad, to seek quicker and more affordable cross-border transactions through cryptocurrency. KPMG reported a robust 25% increase in Nigeria’s crypto inflows in 2024, illustrating the sector’s resilience despite previous fluctuations. Various external factors, such as fines for banks breaching CBN regulations and local currency devaluations, have also impacted adoption trends.

Nonetheless, the rise of the crypto sector has ushered in significant concerns regarding scams. In 2024 alone, global scams in this domain generated $10 billion, with many linked to schemes like pig-butchering and high-yield investment fraud. KPMG emphasized the necessity for vigilance, as these risks prompt continued regulatory interventions.

Adapting to the resilient crypto sector, Nigerian regulators have modified their strategies by implementing initiatives such as the CBN’s Virtual Asset Service Providers (VASPs) guidelines and the SEC’s Accelerated Regulatory Incubation Program (ARIP), reflecting a shift towards clearer and more engaged regulatory frameworks.

KPMG highlighted that incorporating blockchain technology within Nigerian banks can yield transformative benefits. By utilizing blockchain analytics in compliance practices, banks can more effectively identify illicit activities, enhance operational efficiency, and venture into new financial services. The report stated, “Forward-thinking banks can position themselves at the forefront of an increasingly digital financial system by leveraging blockchain technology.” This innovation is deemed vital for fostering competitiveness in the dynamic digital economy.

KPMG’s call for Nigerian banks to embrace blockchain and collaborate with crypto firms is timely, given the rising global cryptocurrency landscape and the need for more efficient financial solutions. Despite challenges such as scams and regulatory adaptations, the resilience of Nigeria’s crypto sector showcases significant opportunities for improvement in digital finance. By leveraging blockchain technology, banks can enhance their operational capabilities and contribute to an evolving economic paradigm.

Original Source: nairametrics.com