The International Monetary Fund (IMF) has raised concerns that the rising use of U.S. dollar-pegged stablecoins in Nigeria could erode demand for the naira and impair the transmission of domestic monetary policy.
The warning was issued in a report titled *"Stablecoins in Nigeria: A Growing Cross-Border Channel,"* which examined how digital assets are reshaping payment flows, remittances, and savings behaviour in Africa's largest economy.
According to the Fund, the migration of cross-border transactions from traditional banking channels to digital wallets and cryptocurrency exchanges is creating a form of digital dollarization. This shift, it said, could limit the CBN's ability to influence economic activity through interest rate decisions and foreign exchange policy.
*"As stablecoins are typically denominated in U.S. dollars, widespread use can resemble a digital form of dollarization. By reducing demand for the local currency, it could weaken the transmission of domestic monetary policy,"* the IMF stated.
The report attributed the trend largely to Nigeria's macroeconomic conditions in 2023 and 2024, including persistent inflation, naira depreciation, and foreign exchange shortages. These factors increased the appeal of dollar-linked digital assets as both a store of value and a payment mechanism.
Nigeria recorded approximately **$59 billion** in crypto-asset inflows between July 2023 and June 2024, the IMF noted. The country ranked second globally on Chainalysis' 2024 Global Crypto Adoption Index and sixth in the 2025 ranking. Within sub-Saharan Africa, Nigeria accounts for nearly 60% of all stablecoin inflows recorded since 2019.
The Fund observed that stablecoins have gained traction partly because they offer faster and cheaper alternatives for cross-border payments. Sending $200 to sub-Saharan Africa costs an average of about 9% through traditional channels, compared with a global average of 6%.
A growing share of payment activity that previously flowed through banks is now moving through crypto exchanges and digital wallets, potentially creating blind spots for regulators, the report added. It warned that monitoring systems designed around traditional financial intermediaries may not fully capture these transactions, complicating efforts to assess capital flows and financial risks.
