IMF Thinks Rising Stablecoin Use in Nigeria Will Weaken the Naira

Nigeria has become one of the world’s fastest-growing markets for dollar-backed stablecoins, with the country recording about $59 billion in crypto-asset inflows between July 2023 and June 2024, according to IMF-cited data, while accounting for roughly 60% of stablecoin inflows into sub-Saharan Africa. As inflation, foreign exchange shortages and high remittance costs push households and businesses toward digital dollars, a February 2026 survey by YouGov, BVNK, Coinbase and Artemis found that 95% of Nigerian respondents preferred receiving payments in stablecoins rather than naira. The International Monetary Fund has warned that the shift could improve financial access and lower transaction costs but may also accelerate “digital dollarisation,” weaken demand for the naira and reduce the Central Bank of Nigeria’s ability to manage monetary policy if regulators fail to keep pace with the rapidly expanding digital asset economy.

Millions of dollars are moving through smartphones, digital wallets and dollar-backed crypto assets in Nigeria, offering faster and cheaper payments but raising concerns that growing reliance on digital dollars could weaken demand for the naira and complicate monetary policy, the International Monetary Fund (IMF) has warned.

Nigeria has emerged as one of the world’s largest crypto markets, with the country receiving about $59 billion in crypto-asset inflows between July 2023 and June 2024, according to IMF-cited data.

The surge has been driven largely by stablecoins, cryptocurrencies designed to maintain a fixed value by being linked to assets such as the U.S. dollar. Unlike volatile digital assets such as Bitcoin, stablecoins are increasingly being used for remittances, international trade payments and as a store of value in economies facing currency volatility.

The IMF said the growing adoption of dollar-denominated stablecoins could deliver benefits by reducing payment costs and improving access to financial services, but warned that it could also accelerate “digital dollarisation” if households and businesses increasingly shift transactions away from the local currency.

“While stablecoins can improve payment efficiency, lower transaction costs and improve financial inclusion, the increasing use of U.S. dollar-denominated stablecoins raises risks to monetary sovereignty, capital flow management and financial stability,” the IMF said in its latest assessment of Nigeria’s economy.

The warning comes as Nigeria’s foreign exchange market has experienced years of pressure, including currency depreciation, inflation and shortages of dollars through traditional banking channels.

For many individuals and businesses, stablecoins have become an alternative route for moving money across borders.

A freelancer receiving payments from overseas clients, a student paying tuition abroad or an importer settling transactions with suppliers can transfer dollar-linked digital assets within minutes, often at lower costs than conventional remittance channels.

The trend is part of a broader shift across emerging markets where consumers are increasingly turning to digital assets as traditional financial systems struggle with high fees, limited access and currency instability.

A February 2026 survey by YouGov, BVNK, Coinbase and Artemis found that Nigeria and South Africa were among the fastest-growing stablecoin markets globally. The survey also found that 95% of Nigerian respondents preferred receiving payments in stablecoins rather than naira.

Nigeria ranked second globally on Chainalysis’ 2024 crypto adoption index and remained among the world’s most active crypto markets in 2025.

The country accounts for roughly 60% of stablecoin inflows into sub-Saharan Africa, highlighting its growing role in the region’s digital payments ecosystem.

The rise of stablecoins is partly linked to the cost of moving money through traditional channels. World Bank data cited by the IMF shows that sending $200 to sub-Saharan Africa costs about 9% of the transaction value on average, compared with a global average of around 6%.

Stablecoins offer users a way to bypass some of those costs, but regulators are increasingly focused on the implications for monetary control.

The IMF warned that widespread adoption of dollar-backed digital assets could reduce demand for the naira, making it harder for the Central Bank of Nigeria to influence economic activity through interest rates and other policy tools.

The Fund also raised concerns that transactions occurring outside traditional banking systems could make it harder for authorities to monitor capital flows and combat financial crime.

The global stablecoin market has expanded rapidly, reaching more than $300 billion in value, dominated by major dollar-linked tokens such as Tether and USD Coin.

Governments around the world are now developing regulatory frameworks aimed at allowing innovation while limiting risks to financial stability.

Nigeria has taken a more pragmatic approach to cryptocurrencies after years of restrictions. In 2021, the Central Bank of Nigeria directed financial institutions to stop facilitating cryptocurrency transactions, pushing much of the market into peer-to-peer channels.

Since then, regulators have shifted toward oversight rather than outright prohibition. The Securities and Exchange Commission has introduced frameworks for digital asset service providers and is examining ways to regulate stablecoin activities.

The IMF has urged Nigerian authorities to improve coordination between the central bank and securities regulators, arguing that digital assets should be incorporated into the country’s formal regulatory framework.

Nigeria and South Africa are emerging as Africa’s largest stablecoin markets as consumers and businesses increasingly use digital dollars for cross-border payments, savings and commerce.

The challenge for policymakers will be balancing the efficiency gains of digital currencies with the need to preserve confidence in national currencies and maintain control over monetary policy.

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