Despite the Central Bank of Nigeria’s (CBN) ban on cryptocurrency trading, Nigeria contributed an estimated $59 billion to the crypto market between July 2023 and June 2024, according to a report by KPMG and blockchain analytics firm, Chainalysis.
The report, obtained by The Guardian, highlights how crypto is reshaping the financial landscape in sub-Saharan Africa, which recorded approximately $125 billion in crypto transactions during the period. Nigeria accounted for nearly half of this figure, solidifying its position as a key player in the region’s digital asset economy.
Why Nigerians Are Turning to Crypto
The report attributes Nigeria’s dominance in the crypto space to economic challenges that have driven citizens to seek alternative financial solutions. Notably, 85% of Nigeria’s total crypto transactions—valued at under $1 million each—came from small-scale retail and professional traders, indicating that crypto is being used for daily transactions rather than just investment purposes.
Additionally, the high costs of cross-border transactions through traditional financial systems have made crypto a faster and more affordable option for remittances, benefiting both Nigerians at home and in the diaspora.
Impact of the 2021 Crypto Ban
The report also points out that the CBN’s 2021 ban on cryptocurrency trading did little to curb its adoption. Instead, Nigeria’s share of global crypto inflows has continued to rise, showing that the market remains resilient despite regulatory restrictions.
KPMG and Chainalysis suggest that Nigeria could benefit from regulating and integrating crypto rather than keeping it at arm’s length. They argue that collaborating with blockchain firms could provide traditional banks with much-needed exposure to technological innovation, particularly in enhancing fraud monitoring and compliance systems.
The Dark Side: Crypto-Related Scams on the Rise
While crypto adoption grows, scammers and fraudsters are also taking advantage of the technology. The report estimates that global crypto scams generated $10 billion in 2024, with pig-butchering and high-yield investment scams accounting for 83.4% of the total scam revenue.
As Nigeria continues to embrace digital finance, experts emphasize the need for robust regulations and security measures to protect users while leveraging blockchain’s potential to transform the financial sector.
