Effect of Blockchain Technology on Financial Inclusion Drive in Nigeria

Abstract

Financial inclusion remains a critical policy priority in Nigeria, where large
segments of the population still lack access to affordable and reliable
formal financial services. This study investigates the effect of blockchain
technology on Nigeria's financial inclusion drive, using cryptocurrency adoption, stablecoin usage for remittances, Decentralised finance (DeFi) uptake, and blockchain-based payment and remittance platforms as proxies for blockchain penetration. Drawing on annual secondary data from 2014 to 2023, the study employs Ordinary Least Squares (OLS) regression: both multiple and bivariate models to assess how these blockchain-enabled channels influence account ownership, usage
of digital financial services, and access to credit among underserved groups. The findings of the bivariate analyses confirm that each blockchain proxy individually exerts a positive, highly significant effect on all three inclusion dimensions, with cryptocurrency adoption yielding the
strongest effect sizes. Nonetheless, regulatory uncertainty, volatility in
crypto-assets, low digital and financial literacy, and gaps in digital infrastructure constrain the full inclusion potential of blockchain
innovations in Nigeria. The study recommends a coherent regulatory
framework, investments in digital identity and infrastructure, and targeted financial literacy programmes to harness blockchain technology as a sustainable driver of inclusive finance in Nigeria.