Our Terms & Conditions | Our Privacy Policy
When Bitcoin launched in 2009, it sparked conversations about the decentralisation of financial services. Central to this was decentralised finance (DeFi), a system that promised open, globally accessible financial services without banks, intermediaries, or gatekeepers.
While DeFi platforms have grown in popularity among individuals, mainstream banks have remained cautious, largely due to the absence of regulatory oversight.
This hesitation could change, according to Obi Emetarom, chief executive officer of Zone, a regulated blockchain infrastructure provider, with the mainstreaming of regulated blockchains, one that blends innovation with trust, compliance, and financial inclusion.
DeFi Momentum
DeFi platforms use smart contracts, self-executing code on a blockchain, to automate financial services like lending, trading, and payments without relying on traditional custodians or central authorities. These platforms remove intermediaries and operate across borders.
“With DeFi, computer programs run all financial operations associated with a financial product and apply rules of the financial product directly to users’ funds without the need for funds to be held in custody by any organisation,” Emetarom said.
Globally, DeFi is projected to reach a valuation of $100 billion by the end of 2025, driven by platforms such as Automated Market Makers (AMMs) and Decentralised Exchanges (DEXs), according to the Nigeria Payment Report by Zone and TC Insight.
“This shift presents new opportunities for financial inclusion and digital transactions, positioning DeFi as a transformative force in Nigeria’s payment ecosystem,” the report stated.
In Nigeria, DeFi platforms are enabling users to earn yields, access loans, and engage in decentralised trading. “DeFi is a key area of growth, as users explore ways to maximise returns and access financial services that might otherwise be unavailable to them,” said Moyo Sodipo, Co-founder of Busha.
Strong crypto adoption has helped fuel this momentum. Nigeria ranked second globally on Chainalysis’ 2024 Global Crypto Adoption Index, receiving about $59 billion in cryptocurrency between July 2023 and June 2024. More than $30 billion of that was received via DeFi platforms in 2023.
Crypto momentum accelerated after the Central Bank of Nigeria banned banks from servicing crypto businesses in 2021. It lifted this in December 2023, signalling a regulatory shift in the country.
Regulatory Shift
In June 2024, the Securities and Exchange Commission (SEC) introduced an Accelerated Regulation Incubation Program (ARIP), mandating registration for all Virtual Asset Service Providers (VASPs). By 2025, the SEC’s Investments and Securities Act officially classified cryptocurrencies and other digital assets as securities.
However, financial institutions remain cautious. “Banks are still cautious, waiting for clear signals from the central bank and SEC before fully entering the market,” Sodipo noted.
“With the right regulatory framework and consumer education, DeFi could become a transformative force in Nigeria’s financial landscape, balancing innovation with consumer protection,” stated Ajibade Laolu-Adewale, chairman, Committee of e-Business Industry Heads (CeBIH).
Read also: Inside Zone’s push to power blockchain adoption
The Role of Regulated Blockchain
According to Emetarom, the key to building trust in Nigeria’s DeFi space lies in regulating the blockchain infrastructure itself.
“A regulated blockchain includes mechanisms to ensure that the applications, tokens, and records within it are safe, compliant, and subject to regulatory oversight,” he said.
This model merges decentralisation with regulation, creating a foundation of trust and legitimacy familiar to traditional finance. “A regulated blockchain includes built-in compliance tools like AML, KYC, monetary policy controls, and proof of reserves. This would allow crypto innovation to scale safely within regulatory bounds,” he added.
Zone, licensed as a payment switch by the Central Bank of Nigeria in 2022, is pioneering this approach. In 2024, the company secured approval to partner with the Nigeria Inter-Bank Settlement System (NIBSS), enabling Payment Terminal Service Aggregator (PTSA) functions on its blockchain.
Today, Zone processes ATM transactions for over a dozen banks and is rolling out a blockchain-powered Point-of-Sale (PoS) solution.
A regulated blockchain consists of four layers: infrastructure, which enables core blockchain features like programmability, immutability, and transparency; regulatory, which includes processes and rules that ensure that all activities of a product are compliant and done in a way that guarantees the overall safety of end-user assets.
The product consists of smart contracts that implement service functionality and enable token issuance, and the external interface, which is responsible for accepting inputs from and publishing outputs to external systems.
This architecture enables automated audits and ongoing regulatory oversight, the foundation of a future-ready, secure DeFi ecosystem.
When done right, regulated blockchain offers transparency, speed, and cost-efficiency, according to Laolu-Adewale of CeBIH.
Banks Starting to Shift
Despite initial hesitation, banks are starting to take DeFi and blockchain more seriously as fintechs continue to outpace them.
“Zone is highly optimistic about 2025, especially following regulatory approval of its decentralised PTSA model, which is expected to spur widespread adoption,” he said. “Traditional banks are beginning to aggressively respond to fintechs.”
The government is also stepping in. In May 2025, the Ministry of Communications, Innovation, and Digital Economy began the process of creating a National Blockchain Policy, building on the foundational work of the earlier National Blockchain Strategy.
“Nigeria is at the threshold of a digital transformation, and blockchain technology offers an unprecedented opportunity to leap forward,” the ministry noted in a policy document.
As Nigeria builds out its regulatory framework, experts note that it can learn from global best practices. “There is a need to tailor global trends to our unique context, especially in areas like DeFi, where regulatory gaps currently limit innovation,” said Musty Mustapha, managing director, Kuda.
In the United States, financial giants like JP Morgan have built blockchain platforms such as Quorum. Central banks in Singapore and Canada are testing blockchain for interbank payments. In Switzerland, regulators have issued guidelines to support blockchain in financial services. South Africa’s Absa Bank recently developed a blockchain-powered cross-border payment system.
“There is a need to create clear regulations and standards for blockchain technology in banking to ensure compliance and foster innovation,” said Obinna Iwuno, president of Nigeria’s Blockchain Association (SiBAN). “Blockchain innovation is not just an option but a necessity for survival and growth.”
Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.
Aggregated From –
Comments are closed.