The International Monetary Fund (IMF) has warned that the rapid rise of stablecoins in Nigeria could weaken the country’s control over its monetary system.
It highlighted this concern in a report on Tuesday following the release of its latest Article IV report on Nigeria, detailed in Annex VII.
According to the Brettonwood financial institution, more people are now turning to dollar-linked digital assets for cross-border payments.
It stressed that stablecoins are becoming a major channel for sending and receiving money across borders, especially through smartphones and digital wallets.
It said the trend reflects how households and small firms are bypassing traditional banking systems due to long-standing frictions in cross-border transactions.
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The IMF raised concern that the growing use of US dollar–pegged stablecoins could act as a “digital form of dollarisation,” reducing demand for the naira and weakening the effectiveness of domestic monetary policy.
It warned that this shift could undermine “monetary sovereignty” by making it harder for authorities to control the money supply and influence economic conditions.
The report noted the scale of adoption in Nigeria, pointing out that the country received about $59 billion in crypto-asset inflows between July 2023 and June 2024.
It also highlighted Nigeria’s ranking as second globally on Chainalysis’s 2024 Global Crypto Adoption Index and sixth in 2025, with the country accounting for roughly 60 per cent of stablecoin inflows in sub-Saharan Africa since 2019.
According to the IMF, the appeal of stablecoins lies in their speed, lower cost, and ease of use, especially for remittances and payments where traditional channels remain expensive.
The World Bank estimates that sending $200 to sub-Saharan Africa still costs about nine per cent of the transaction value, above the global average of six per cent.
The IMF also pointed to domestic economic pressures, including naira depreciation, high inflation, and limited access to foreign exchange in 2023 and 2024, which increased demand for dollar-linked digital assets.
It noted that restrictions placed by the Central Bank of Nigeria on banks servicing crypto exchanges in February 2021 pushed more activity into peer-to-peer and less regulated platforms.
Beyond monetary concerns, the report flagged risks to “financial integrity,” noting that the movement of funds outside traditional banking channels makes transactions harder to monitor and may increase exposure to illicit financial flows.
While acknowledging that stablecoins can improve the speed and cost of payments, the IMF said attempts to restrict their use would likely be only partly effective.
It, instead, urged the Nigerian authorities to focus on maintaining a stable currency, strengthening oversight of digital asset providers, improving transaction data, and upgrading payment systems to reduce reliance on unregulated channels.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X