Despite the Central Bank of Nigeria’s (CBN) ban on cryptocurrency trading, Nigeria contributed an estimated $59 billion to the virtual currency market between July 2023 and June 2024, a new report has revealed.
The report, jointly released by KPMG and blockchain analytics firm Chainalysis, highlights the rapid transformation of the financial landscape in sub-Saharan Africa, with crypto assets playing a crucial role. The region accounted for approximately $125 billion in crypto transactions during the period, with Nigeria leading the way.
According to the report, the surge in Nigeria’s crypto adoption is largely driven by economic challenges, as 85% of the total crypto value received by Nigerian exchanges came from small retail and professional-sized transactions under $1 million. This suggests that, for many Nigerians, cryptocurrency is not just an investment tool but a practical medium for daily transactions.
The report also pointed to the high costs of cross-border remittances through traditional finance channels as a major factor pushing Nigerians—both domestically and in the diaspora”to embrace crypto for faster and more affordable transactions.
The 2021 CBN ban on cryptocurrency trading was meant to curb its use but has had little effect on its growth and popularity, the report noted. Instead, Nigeria’s share of global crypto value inflows has continued to rise, demonstrating the resilience of the sector.
KPMG and Chainalysis are now urging Nigerian authorities to shift towards a regulatory approach rather than maintaining a blanket restriction. The report suggests that collaboration between traditional banks and blockchain companies could provide significant advantages, allowing banks to tap into innovative financial technology while improving monitoring systems.
By partnering with blockchain firms, banks can enhance their legacy systems with monitoring capabilities that surpass traditional methods, the report stated.
However, as crypto adoption grows, so do concerns about illicit activities. The report warns that bad actors are exploiting blockchain technology for fraudulent schemes. In 2024 alone, global crypto-related scams generated $10 billion, with pig-butchering and high-yield investment scams accounting for 83.4% of the total.
Despite these risks, the report emphasizes that Nigeria stands to benefit from a well-regulated crypto industry, which could enhance financial inclusion, provide economic relief, and improve cross-border transactions.
With crypto’s undeniable presence in Nigeria’s economy, the question now is whether regulators will adapt to the trend or continue to push back against an industry that refuses to be sidelined.
