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IMF warns as Nigeria captures 60% of SSA stablecoin inflows
•Flags risks to monetary policy, financial integrity
•As Nigeria ranks 2nd globally, with $59bn crypto inflows
By Emma Ujah & Elizabeth Adegbesan
The International Monetary Fund (IMF) has disclosed that Nigeria accounts for about 60 percent of stablecoin inflows into Sub-Saharan Africa,SSA, while warning that the growing use of dollar-backed digital assets could pose risks to monetary policy and financial stability.
In its latest report, the IMF stated: “Within sub-Saharan Africa, Nigeria accounts for roughly 60 percent of stablecoin inflows since 2019. Stablecoins now form a key bridge between crypto markets and the traditional financial system.”
The Fund added: “The scale is striking, even though measure-ment remains imperfect. Nigeria received about $59 billion in crypto-asset inflows between July 2023 and June 2024.”
According to the IMF, “what began as a niche technology has become a meaningful cross-border payments channel,” with Nigerian households and small businesses increasingly using stablecoins for international transactions and payments to overseas suppliers.
The report noted that adoption accelerated during 2023 and 2024 amid macroeconomic pressures.
“Stablecoins emerged as a hedge against currency risk and a convenient means of paying overseas suppliers,” the Fund said.
It explained that “the sharp depreciation of the naira, high inflation, and constrained access to foreign exchange” contributed to rising demand for dollar-linked digital assets.
The IMF also noted that after the Central Bank of Nigeria (CBN) restricted banks from servicing cryptocurrency exchanges in February 2021, “activity shifted to less regulated channels, notably peer-to-peer platforms.”
While acknowledging the benefits of stablecoins, the Fund warned of potential consequences for the economy.
“As stablecoins are typically denominated in U.S. dollars, widespread use can resemble a digital form of dollarization,” it stated. “By reducing demand for the local currency, it could weaken the transmission of domestic monetary policy.”
The IMF further cautioned that, “transactions traditionally routed through banks are increasingly taking place through digital wallets and crypto exchanges,” adding that “existing monitoring systems designed for conventional financial intermediaries may not adequately capture such transactions.”
According to the report, “the speed and relative anonymity of some platforms heighten the risks of money laundering and other illicit financial activities.”
However, the IMF advised against outright suppression of stablecoins, saying such measures would likely have limited success.
“The most effective defence against digital dollarization is a stable and credible domestic currency,” the Fund stated. “Nigeria’s recent macroeconomic reforms and tighter monetary policy have helped restore confidence in the naira. Sustaining this progress will be critical.”
It also urged stronger oversight, improved monitoring systems and upgraded payment infrastructure, stressing that “these risks are not unique to Nigeria, but the scale of adoption makes them more pronounced.”
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