Lagos, June 16, 2026 – The International Monetary Fund (IMF) has drawn attention to the growing role of stablecoins in Nigeria’s financial ecosystem, describing them as an increasingly important tool for cross-border transactions while cautioning against potential risks to economic stability.
In a recent report, the IMF observed that digital currencies pegged to the U.S. dollar are becoming more popular among Nigerians seeking faster and cheaper ways to send and receive money across borders.
The study noted that widespread smartphone ownership and the growing use of digital wallets have accelerated the adoption of stablecoins among households and small businesses.
According to the report, titled “Stablecoins in Nigeria: A Growing Cross-Border Channel,” and written by Axel Schimmelpfennig and Bo Zhao, stablecoins have evolved beyond a niche innovation into a significant component of international payments.
The IMF estimated that Nigeria attracted approximately $59 billion in crypto-asset inflows between July 2023 and June 2024, making it one of the most active digital asset markets globally.
It further highlighted Nigeria’s strong position in the global cryptocurrency space, noting that the country ranked second in the 2024 Chainalysis Global Crypto Adoption Index and accounted for roughly 60 per cent of stablecoin inflows into sub-Saharan Africa since 2019.
The report explained that stablecoins are increasingly being used to connect cryptocurrency markets with conventional financial systems, offering users a practical alternative for moving funds internationally.
Their appeal, according to the IMF, lies largely in their ability to facilitate quicker and less expensive transfers compared to traditional payment channels.
This advantage has become particularly important in regions where remittance costs remain high. The report noted that average remittance fees across sub-Saharan Africa hover around nine per cent, making lower-cost digital alternatives attractive to users.
The IMF also linked the rise in stablecoin adoption to domestic economic conditions, including persistent inflation, depreciation of the naira and limited access to foreign exchange.
These factors, it said, have encouraged individuals and businesses to seek dollar-linked assets as a hedge against currency volatility and as a means of settling international transactions.
The report recalled that regulatory restrictions imposed on banks’ relationships with cryptocurrency exchanges in 2021 prompted many users to migrate to peer-to-peer platforms, where oversight is generally less robust.
While acknowledging the potential benefits of stablecoins for trade, remittances and financial inclusion, the IMF cautioned that their rapid growth could pose challenges for monetary authorities.
The organisation warned that extensive use of dollar-backed stablecoins could contribute to a form of digital dollarisation, reducing reliance on the national currency and weakening the effectiveness of monetary policy.
It also highlighted concerns about financial crime, noting that some digital platforms may not apply the same compliance and monitoring standards required of traditional financial institutions.
The speed and relative anonymity of certain transactions, the report stated, could increase vulnerabilities to money laundering and other illicit activities if adequate safeguards are not implemented.
Rather than attempting to eliminate stablecoin use, the IMF recommended a balanced regulatory approach that encourages innovation while protecting the financial system.
Among its key recommendations, the fund urged Nigerian authorities to safeguard confidence in the naira, strengthen regulatory frameworks and establish clearer guidelines for stablecoin issuers and service providers.
The report also called for regulations that align with international best practices while remaining responsive to Nigeria’s unique economic realities.
In addition, it stressed the importance of improving data collection and monitoring systems to help regulators better understand stablecoin activity. This, it suggested, could involve combining blockchain analytics with information on conversions between the naira and digital assets.
The IMF further encouraged continued investment in payment infrastructure, noting that Nigeria’s instant payment systems and regional payment initiatives have already demonstrated significant progress.
According to the fund, expanding access to faster, cheaper and more interconnected payment networks could reduce dependence on informal financial channels.
The report concluded that stablecoins are likely to remain a permanent feature of the evolving digital finance landscape, serving as a response to longstanding inefficiencies in cross-border payments. It emphasised that maintaining sound economic policies and effective regulation will be critical to ensuring that innovation delivers benefits without undermining financial stability.