The International Monetary Fund has issued a stark warning over Nigeria’s explosive growth in stablecoin adoption, cautioning that the trend is beginning to erode the Central Bank of Nigeria’s grip on monetary policy and could represent a creeping form of digital dollarisation.
In a report titled “Stablecoins in Nigeria: A Growing Cross-Border Channel,” the IMF warned that the rapid expansion of stablecoin usage in Nigeria could significantly weaken demand for the naira and reduce the effectiveness of domestic monetary policy.
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The IMF estimated that Nigeria received around $59 billion in crypto-asset inflows between July 2023 and June 2024, and the country accounted for roughly 60% of stablecoin inflows into sub-Saharan Africa since 2019. Those are not small numbers for an economy still grappling with inflation and foreign exchange scarcity. Nigeria ranked second globally on Chainalysis’s 2024 Global Crypto Adoption Index and sixth in 2025, underscoring just how deeply embedded digital assets have become in the country’s financial fabric.
The IMF’s concern is rooted in a straightforward but serious dynamic. The concern centres on what economists describe as digital dollarisation, a process in which households and firms increasingly hold and transact in dollar-denominated digital assets rather than the local currency, potentially reducing the CBN’s ability to influence liquidity conditions and steer the economy through interest rate policy. Persistent inflation, a weakening naira, and limited access to foreign currency have pushed more Nigerians toward dollar-linked stablecoins, which have become an alternative way to hold value and access US dollars when traditional options are either costly or difficult to obtain.
The World Bank reports that the average cost of sending $200 to sub-Saharan Africa via conventional channels is approximately 9%, compared to a global average of 6%, making stablecoins an obvious and cheaper alternative for millions of Nigerians sending and receiving money across borders. The IMF also noted that after the CBN restricted banks from servicing crypto exchanges in February 2021, a substantial portion of crypto activity shifted to less regulated channels, particularly peer-to-peer platforms.
Rather than calling for a ban, the IMF listed four priorities for Nigeria: protecting monetary stability through credible domestic currency policy, clarifying oversight for stablecoin issuers, improving data visibility through blockchain analytics and reporting on naira-stablecoin conversions, and upgrading payment systems to reduce reliance on unregulated channels. Lawmakers in Nigeria have already moved on this front, recently advancing the Virtual Asset Service Providers Regulation Bill 2026, which would require crypto exchanges and other operators to obtain licences and follow compliance rules.
The IMF’s report lands at a critical moment. Nigeria’s stablecoin economy is no longer a fringe phenomenon but a structural feature of how millions of citizens and small businesses manage money. The challenge for policymakers is finding the balance between harnessing that momentum and ensuring the naira does not become a casualty of it.
