The International Monetary Fund (IMF) has said that stablecoins now form a key bridge between crypto markets and the traditional financial system in Nigeria, ranking the country top in inflows in Sub-Saharan Africa.
According to a new report from the institution, Nigeria received about $59 billion in crypto-asset inflows between July 2023 and June 2024. It ranked second globally on Chainalysis’s 2024 Global Crypto Adoption Index, and sixth in 2025.
Within sub-Saharan Africa, Nigeria accounts for roughly 60 per cent of stablecoin inflows since 2019, the report titled Stablecoins in Nigeria: A Growing Cross-Border Channel’ released on Tuesday, noted.
Nigerian households and small firms are moving money across borders in a new way: via smartphones, digital wallets, and US Dollar–pegged crypto assets known as stablecoins.
What began as a niche technology has become a meaningful cross-border payments channel. Its rapid growth is easing long-standing frictions in cross-border transactions.
It is also testing the limits of existing monetary and regulatory frameworks.
IMF noted that the appeal is straightforward, adding that stablecoins allow users with a smartphone and internet access to receive remittances or make cross-border payments in minutes, often at a lower cost than traditional channels.
“For households and small firms with limited access to formal banking services, this is a practical alternative.”
According to the report, global drivers help explain the broader uptake in Nigeria.
“Stablecoins are relatively stable in value, easy to transfer, and widely used as settlement assets within crypto markets.
“They facilitate trading between exchanges and provide a convenient store of liquidity. For remittances, they can undercut conventional channels, where the average cost of sending US$200 to sub-Saharan Africa remains around 9 per cent of transaction value, well above the global average of 6 per cent, according to the World Bank.”
Domestic conditions have amplified these effects. In 2023 and 2024, the sharp depreciation of the naira, high inflation, and constrained access to foreign exchange increased demand for dollar-linked assets.
Stablecoins offered both a hedge against currency risk and a tool for paying overseas suppliers.
After the Central Bank of Nigeria (CBN) restricted banks from servicing crypto exchanges in February 2021, IMF said activity shifted to less regulated channels, notably peer-to-peer platforms.
The rise of stablecoins in Nigeria brings clear benefits – faster, cheaper cross-border payments can support trade, remittances, and financial inclusion.
However, it said the same features raise policy concerns, including monetary sovereignty. As stablecoins are typically denominated in US Dollars, widespread use can resemble a digital form of dollarisation. By reducing demand for the local currency, the IMF said it could weaken the transmission of domestic monetary policy.
“Another concern is financial integrity. Activity that once flowed through banks is moving increasingly to digital wallets and crypto exchanges.
Monitoring systems designed for traditional intermediaries may not capture these transactions effectively, the report stated, noting that the speed and anonymity of some platforms can also increase risks of illicit finance, including money laundering.
IMF noted that these risks are not unique to Nigeria, but the scale of adoption makes them more pronounced.
The IMF also said Nigeria should adopt a balanced approach to stablecoins by supporting innovation while managing risks. It identified four priorities: maintaining a stable and credible Naira, strengthening oversight of stablecoin issuers, improving data collection on stablecoin transactions, and enhancing payment infrastructure.
The Fund noted that recent economic reforms have helped restore confidence in the naira but urged authorities to align regulations with emerging global standards and improve monitoring through better blockchain and transaction data. It also said further investment in faster and cheaper cross-border payment systems could reduce reliance on unregulated stablecoin channels.
The report noted that stablecoins are neither a passing trend nor a complete substitute for traditional finance, saying they are best seen as a response to persistent frictions in cross-border payments. In Nigeria, those frictions are real, and users have found a workaround.
“The policy challenge is to narrow the gap that made the workaround attractive, while ensuring that new risks remain contained. That requires a clear strategy: open to innovation but anchored in sound macroeconomic policy and effective regulation”, the report concluded.