IMF: Stablecoins Become Major Cross‑Border Channel in Nigeria

The International Monetary Fund reported on June 16 that dollar‑pegged stablecoins are now a major cross‑border payments channel in Nigeria, with households and firms using them to send remittances, pay overseas suppliers and manage liquidity.

The IMF noted that stablecoins have grown as users seek ways around high transfer costs, limited access to bank accounts, foreign‑exchange shortages and sharp naira swings. The fund wrote that what began as a niche technology has become a meaningful payments channel for many users in the country.

The report estimated about $59 billion in crypto‑asset inflows to Nigeria between July 2023 and June 2024. Since 2019, Nigeria accounted for roughly 60% of stablecoin inflows into sub‑Saharan Africa, the IMF said. The fund linked the increase to 2023–24 naira depreciation, high inflation and constrained access to foreign currency, which raised demand for dollar‑linked assets as a hedge and a payment tool.

The IMF described a shift in how Nigerians access crypto services after the Central Bank of Nigeria in 2021 restricted banks from servicing crypto exchanges. According to the report, activity moved toward peer‑to‑peer transfers, digital wallets and less regulated channels, a shift that complicates financial monitoring and raises risks of illicit finance.

The report warned that widespread use of U.S. dollar‑denominated stablecoins could lead to a form of digital dollarization, weakening demand for the naira and reducing the effectiveness of domestic monetary policy. The IMF acknowledged lower costs and faster payments but flagged monetary and regulatory risks tied to large‑scale stablecoin use.

To address those risks, the IMF recommended stronger oversight, clearer regulation specific to stablecoins, better transaction data and upgrades to cross‑border payment infrastructure. The fund advised that Nigeria align its rules with emerging frameworks in the European Union, Singapore, Hong Kong, Japan and the United States and noted that attempts to suppress stablecoin use are likely to be only partly effective.

The IMF concluded that stablecoins are not a passing trend and do not fully replace traditional finance; in Nigeria they have been used beyond speculative trading to address persistent inefficiencies in existing payment networks.