Cryptocurrency transactions in Nigeria have seen a surge, despite the Central Bank of Nigeria (CBN) banning cryptocurrency trading. A recent report by KPMG and blockchain analytics firm Chainalysis revealed that Nigerians transacted approximately $59 billion in crypto assets between July 2023 and June 2024. The report also highlighted that cryptocurrency is reshaping financial systems across sub-Saharan Africa, with the region accounting for an estimated $125 billion in crypto transactions.
Nigeria’s contribution of $59 billion makes it the leading player in the region. Economic hardship was identified as a key driver of Nigeria’s high crypto adoption, with 85% of the total crypto value received by local exchanges consisting of small retail and professional transactions under $1 million. This indicates that crypto is being used for everyday financial transactions rather than solely as an investment asset.
The high costs associated with cross-border transactions via traditional banking channels have pushed many Nigerians towards cryptocurrency as a faster and more cost-effective remittance option. Despite the CBN’s ban on crypto trading in 2021, the report noted that the restrictions have not deterred the growth of cryptocurrency in Nigeria. In fact, Nigeria’s share of the global crypto market has continued to rise.
KPMG and Chainalysis suggested that a shift towards regulation and integration could be more beneficial than outright restrictions. They advised that collaboration between banks and blockchain firms could expose financial institutions to technological innovation, enabling them to upgrade monitoring systems beyond traditional capabilities.
However, the report also highlighted the risks associated with crypto adoption, particularly concerning scams and fraud. Crypto-related scams generated an estimated $10 billion in revenue in 2024, with “pig-butchering” and high-yield investment scams accounting for 83.4% of fraudulent activities.
As crypto adoption continues to grow, the report emphasized the need for a regulatory framework that supports innovation while safeguarding users from illicit activities. It is crucial to strike a balance between fostering technological advancements in the financial sector and protecting consumers from fraudulent schemes.
