How Banks Can Seize Opportunities in Africa’s Growing Blockchain
The application of blockchain technology in finance has revolutionized the way it is viewed and done. One of the most exciting uses for this technology is what is called Tokenization, or the creation of digital tokens that represent ownership of an asset like a house, bottle of wine, etc, that exists in real life. The way banks can use these tokens will increase liquidity to banks, provide more opportunities for investments, and create new sources of revenue for banks. In Africa where many people are still limited in their ability to use capital markets and many countries have little or no traditional banking systems, RWAs (Real world assets) could provide great opportunities for banks to eliminate barriers that have traditionally restricted broader access to financial services and products. The wide-spread use of RWAs can not only improve efficiencies but more importantly will change the overall Financial Ecosystem in Africa from being mainly focused on creating opportunities for the few to provide access to all people around the world to give everyone equal (and fair) access to the financial markets.
According to PwC Retail investments remain highly active across Digital Assets, despite uncertainty surrounding regulations. This reflects a continued enhancement of Financial Market Innovation. Deloitte estimates that by 2030, 25% of all International Transfers will be made on Tokenized Networks, representing over $50 billion in potential savings to businesses each year. This indicates a significant opportunity for African banks, through the use of Tokenization, to provide more modern services, improve efficiencies, and compete on an international level. The increasing demand from investors for access to digital assets (both through establishing digital asset exchanges and through greater use of tokenization), the increasing technological maturity of organizations engaged in tokenized financial products, and the ongoing evolution of Financial Markets, all indicate that Tokenization is not simply a fad; rather, it represents a Structural Transformation to which African banks must adapt.
1. A Rapidly Growing Market :
According to PwC, tokenized assets might grow from $2 trillion – 4 trillion by 2030, resulting from the adoption of regulatory clarity and institutional participation. According to Deloitte, tokenized transactions can reduce settlement time from several days to merely seconds, as well as help to lower costs and enhance global competitiveness in the payment industry. In addition to payments, tokenization will also have a significant impact on capital markets. As an example, Bond issuance will occur much more quickly, Securitization of loans will happen faster, and collateral will be managed more effectively. This bodes well for African banking: While African banks should not only catch up to their global counterparts, but should also attempt to leapfrog out of traditional infrastructure barriers in order to become pioneers of future financial innovation…
2. Africa’s Blockchain Landscape :
According to the African Blockchain Report 2025, there has been an increase in the use of blockchain throughout Africa. The amount of venture capital given to blockchain companies increased by 120% from 2021 to 2024. Nigeria, Kenya, and South Africa are the most significant contributors to this growth.
Mobile phones are being used by over 80% of African citizens; however, 60% of Africans do not have bank accounts. Tokenized financial products have great potential to meet this demand, as users can access them through their mobile devices.
Beyond financial applications, blockchain is being used in other industries such as agriculture, energy, and logistics. For example, smart contracts are being used in agriculture to insure crops and provide transparency within the supply chain, while peer-to-peer trading of solar power credits is emerging as a sustainable way to address energy needs.
Logistics companies are using tokenized bills of lading to streamline trade and reduce the incidence of fraud. Additionally, governments are investigating how to use blockchain technology for their land registry and identity systems. These government initiatives could directly assist with the tokenization of real estate and other real-world assets (RWAs).
The growth of blockchain throughout Africa demonstrates that Africa continues to actively shape the development and use of blockchain technologies for its own unique challenges.
3. Why Banks Should Care: Tangible Business Value ?
There are many opportunities available through tokenization for banks to generate revenues. These revenues will result not only from theoretical possibilities but from actual value that banks can directly monetize from services such as digital custody, issuance of tokens and trading of tokens in the secondary market, or providing liquidity and market-making services. Digital custody services have grown by 58% year-on-year based on the inflow of institutions into this space; this demonstrates that digital custody services are now a significant source of revenue for banks. Tokenization also provides an opportunity for banks to offer advisory services, compliance consulting, and create new investment products for retail and institutional clients.
Through advances in technology, banks can improve their processes and streamline operations, all while providing customers with a more reliable and secure way to conduct business. With some of these technological improvements like Blockchain, banks can reduce the time it takes to settle transactions from two or three days after trade date to almost instantaneous; reduce reconciliation errors by up to 90 %; and decrease average transaction fees for cross-border payments by 34 %. The efficiencies gained through the application of large-scale improvements will result in significantly decreased operating expenses and smooth capital flows both of which will be critical for any bank. The ability to decrease costs and shorten timeframes with cross-border transactions will have a significant impact on the economies of African nations.
With tokenized assets, not only are retail investors able to participate in previously illiquid markets through fractional ownership; there is also a significant increase in retail participation, approximately 37%, leading to 30-40% greater liquidity for those historically illiquid assets. By providing access to institutional-grade products (real estate funds/ infrastructure bonds/ commodities), banks can reach out to more clients. The democratization of the investment opportunity will enable banks to unlock additional trading & investment volume which were not able to be accessed by banks prior; this creates new growth opportunities for banks.
4. Why Tokenization Signals a Structural Shift ?
The evolution of tokenization is currently being recognised as a fundamental change to existing financial products and to the market infrastructure that supports the delivery of financial products and services. Valuing a total addressable market for tokenised assets in 2024 to be approx. $865.5 billion – growing to $5 trillion by 2029 indicates the growing shift toward this method of delivering financial services. To date there are 87% of banks in the G20 countries that are using some form of blockchain technology and the tokenisation of assets will become an increasingly important part of their long-term strategy. In Africa, this development is also seen as an opportunity to leapfrog existing legacy systems to create a new financial services infrastructure from the ground up that is both modern and accessible. Tokenisation is not just about providing greater efficiency; it is also about creating a new architecture for the delivery of financial services.
5. Challenges & Risks
Although Tokenization holds great promise, there are many obstacles to its success including; regulatory uncertainty, lack of established standards and buying violations, technology infrastructure issues such as uneven access to the internet, low levels of blockchain infrastructure, retail investors needing education about Tokenization and its benefits, cybersecurity issues (such as hacking and fraud), and lack of inter-operability between blockchain ecosystems. Addressing all of those items will be key for long-term growth.
Conclusion
Banks in Africa have an outstanding opportunity to reform how they operate through the tokenization of tangible assets. Blockchain will provide banks access to new sources of revenue, by opening up investments globally, as well as creating a platform for African banks to lead innovation in financial technology. The global market for tokenization is projected to be in the trillions by the year 2030; however, banks in Africa must proceed with careful, strategic, and inclusive plans to capitalize on this opportunity. The advent of tokenization represents not only a technological improvement but an overall structural change that will permanently change the financial landscape of Africa.
How can financial institutions prepare their digital infrastructure for the next wave of blockchain-powered financial services ?
At Nexfing, we support financial institutions in designing secure, smart and tailor-made digital solutions by integrating advanced technologies such as blockchain and artificial intelligence into their core systems and digital ecosystems.
From technology consulting and architecture design to the development and integration of custom digital platforms, our approach helps banks modernize their infrastructure, strengthen security, and unlock new opportunities for innovation in an increasingly digital financial landscape.
Sources:
PWC : https://www.pwc.com/ng/en/assets/pdf/asset-tokenisation.pdf
PWC : https://www.pwc.com/us/en/tech-effect/emerging-tech/tokenization-in-financial-services
Africa business : https://africabusiness.com/2025/07/01/africa-blockchain-report-2025-blockchains-multifaceted-role-in-economic-development