Systemic Risk and Crypto Adoption in Nigeria: Implications for Financial Performance
DOI:
https://doi.org/10.51137/wrp.ijarbm.443Keywords:
systemic risk, cryptocurrency adoption, financial performance, NigeriaAbstract
This study examines the relationship between systemic risk, cryptocurrency adoption, and financial performance in Nigeria, a leading African economy characterised by persistent macroeconomic instability, regulatory uncertainty, and financial informality. While cryptocurrencies and blockchain-based innovations are widely recognised for their potential to enhance financial inclusion and capital mobility, their integration into fragile monetary systems remains uneven. Drawing on comparative trend analysis covering the period 2014–2024, the study explores how decentralised crypto platforms, peer-to-peer exchanges, and stablecoin usage influence key financial indicators, including banking sector liquidity, exchange rate stability, and capital adequacy. The analysis is anchored in Financial Contagion Theory, Market Integration Theory, and Institutional Theory to explain how technological disruption, weak governance structures, and informal financial practices interact to reshape systemic risk exposure in emerging economies. The findings indicate that although cryptocurrency adoption improves transactional efficiency and access to alternative assets, its widespread use in Nigeria weakens monetary policy transmission, intensifies capital flight, and heightens financial volatility, particularly in the absence of effective regulatory oversight. The study recommends the development of a unified regulatory framework, enhanced market surveillance mechanisms, and inclusive financial governance models that align crypto innovation with Nigeria’s financial stability objectives and broader digital economy agenda.
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