The warning was contained in a new report titled “Stablecoins in Nigeria: A Growing Cross-Border Channel,” which examined the increasing use of digital assets for payments, remittances and savings.
According to the Fund, the shift of cross-border transactions from traditional banking channels to cryptocurrency exchanges and digital wallets is creating a form of digital dollarisation that could complicate exchange-rate management and monetary policy implementation.
The report noted that as more Nigerians hold and transact in dollar-pegged stablecoins, demand for the local currency may decline, limiting the Central Bank of Nigeria’s ability to influence economic activity through interest-rate adjustments and foreign-exchange measures.
The IMF linked the trend to macroeconomic pressures experienced in recent years, including high inflation, naira depreciation and foreign exchange shortages, which have increased the attractiveness of dollar-linked digital assets as stores of value and payment instruments.
“As stablecoins are typically denominated in U.S. dollars, widespread use can resemble a digital form of dollarisation. By reducing demand for the local currency, it could weaken the transmission of domestic monetary policy,” the report stated.
Nigeria’s Crypto Adoption
The Fund highlighted Nigeria’s growing prominence in the global cryptocurrency market. It estimated that the country received approximately $59 billion in crypto-asset inflows between July 2023 and June 2024.
Nigeria ranked second globally in Chainalysis’ 2024 Global Crypto Adoption Index and sixth in the 2025 rankings, reflecting the country’s continued embrace of digital assets.
According to the report, Nigeria accounts for nearly 60 per cent of all stablecoin inflows recorded in Sub-Saharan Africa since 2019, underscoring the growing role of stablecoins within the country’s financial ecosystem.
The IMF noted that stablecoins have become increasingly attractive because they offer faster and cheaper alternatives for international transfers and remittances.
It observed that sending $200 to Sub-Saharan Africa through traditional channels costs an average of about nine per cent, significantly higher than the global average of six per cent, encouraging users to seek lower-cost digital alternatives.
However, the Fund cautioned that the migration of payment activities from regulated banking systems to crypto platforms could create regulatory blind spots and make it more difficult for authorities to monitor capital flows and financial risks.
The report also raised concerns about potential vulnerabilities to money laundering and other illicit financial activities, citing the speed and relative anonymity associated with some digital asset platforms.
IMF Recommendations
Rather than imposing outright restrictions, the IMF recommended a balanced regulatory approach that addresses the economic factors driving stablecoin adoption while strengthening oversight.
Among its recommendations were maintaining macroeconomic stability, improving confidence in the naira, providing regulatory clarity for stablecoin issuers and aligning frameworks developed by the Central Bank of Nigeria and the Securities and Exchange Commission with international standards.
The Fund also called for enhanced blockchain analytics, improved reporting of naira-to-stablecoin conversions and continued investment in payment infrastructure to make regulated financial channels more competitive.
“Stablecoins are a response to persistent frictions in cross-border payments. The policy challenge is to narrow the gap that made the workaround attractive, while ensuring new risks remain contained,” the report stated.
The warning comes amid continued growth in cryptocurrency adoption across Nigeria. Recent industry research indicates that about 40 per cent of Nigerians now use cryptocurrency for international money transfers, highlighting the increasing role of digital assets in cross-border payments and financial services.
