The International Monetary Fund (IMF) says Nigeria is responsible for about 60 percent of stablecoin inflows into sub-Saharan Africa, underscoring the country’s increasing reliance on digital assets for cross-border transactions.
In an analysis published in its latest Article IV consultation report on Nigeria, the IMF noted that households and small businesses are increasingly using stablecoins — crypto assets tied to the US dollar — to send and receive money internationally.
The fund stated that Nigeria recorded about $59 billion in crypto-asset inflows between July 2023 and June 2024, placing it second globally in Chainalysis’ 2024 Global Crypto Adoption Index and sixth in the 2025 ranking.
“Stablecoins now form a key bridge between crypto markets and the traditional financial system,” the IMF said.
According to the report, stablecoins are becoming popular because they enable faster and cheaper cross-border payments and remittances compared to traditional systems.
“The appeal is straightforward. Stablecoins allow users with a smartphone and internet access to receive remittances or make cross-border payments in minutes, often at lower cost than traditional channels,” the fund said.
“For households and small firms with limited access to formal banking services, this is a practical alternative.”
The IMF added that the trend has been strengthened by local economic pressures, including sharp naira depreciation, high inflation, and limited access to foreign exchange in 2023 and 2024.
It also noted that stablecoins are now widely used as both a store of value and a payment method for businesses settling international obligations.
“Stablecoins offered both a hedge against currency risk and a tool for paying overseas suppliers,” the IMF said.
The institution further highlighted that after the Central Bank of Nigeria (CBN) restricted banks from servicing cryptocurrency exchanges in February 2021, much of the activity shifted to peer-to-peer platforms and other less regulated channels.
‘Stablecoin adoption could pose threat to monetary policy’
While acknowledging the advantages of stablecoin use, the IMF warned that it could create challenges for monetary policy and financial regulation if not properly managed.
“One is monetary sovereignty. As stablecoins are typically denominated in US dollars, widespread use can resemble a digital form of dollarization,” the report said.
“By reducing demand for the local currency, it could weaken the transmission of domestic monetary policy.”
The fund also raised concerns about financial integrity risks, noting that more transactions are now moving away from regulated institutions into digital wallets and crypto exchanges.
“Monitoring systems designed for traditional intermediaries may not capture these transactions effectively,” the IMF said.
“The speed and anonymity of some platforms can also increase risks of illicit finance, including money laundering.”
To mitigate these risks, the IMF advised Nigerian authorities to maintain macroeconomic stability, strengthen regulation, and improve monitoring of stablecoin activity.
“The most effective defense against digital dollarization is a stable and credible domestic currency,” the fund said.
It added that recent reforms and tighter monetary policy have helped support confidence in the naira, stressing the importance of sustaining progress.
The IMF also noted that Nigeria has introduced regulatory measures through the Securities and Exchange Commission (SEC) and guidance from the CBN on virtual asset service providers.
However, it recommended clearer rules on stablecoin issuers and stronger alignment with global standards.
“Attempts to suppress stablecoin use are likely to be only partly effective,” the report said.
“A more durable approach is to allow innovation while managing risks.”
The fund further called for better data collection on naira-to-stablecoin transactions and improved payment infrastructure to reduce reliance on unregulated channels.
“Stablecoins are neither a passing trend nor a complete substitute for traditional finance,” the IMF said.
“They are best seen as a response to persistent frictions in cross-border payments.”
It concluded that Nigeria’s key policy challenge is to balance innovation with financial stability while addressing the gaps driving stablecoin adoption.