Nigeria has emerged as the largest destination for stablecoin inflows in sub-Saharan Africa, with digital dollar-pegged assets increasingly becoming a preferred channel for cross-border payments, remittances and trade transactions, according to a new report by the International Monetary Fund (IMF).
The report, titled “Stablecoins in Nigeria: A Growing Cross-Border Channel,” revealed that Nigeria received approximately $59 billion in crypto-asset inflows between July 2023 and June 2024, underscoring the country’s growing influence in the global digital asset ecosystem.
The IMF noted that stablecoins have evolved beyond their initial role within cryptocurrency markets and now serve as a critical bridge between digital assets and the traditional financial system, particularly in countries facing foreign exchange constraints and high transaction costs.
The development further reinforces Nigeria’s position as one of the world’s most active crypto markets. According to data cited in the report, the country ranked second globally in Chainalysis’ 2024 Global Crypto Adoption Index and sixth in the 2025 ranking. Since 2019, Nigeria has accounted for nearly 60 percent of all stablecoin inflows into sub-Saharan Africa.
The Washington-based institution observed that Nigerian households and small businesses are increasingly turning to smartphones, digital wallets and U.S. dollar-linked stablecoins to move money across borders, bypassing many of the bottlenecks associated with traditional financial channels.
“What began as a niche technology has become a meaningful cross-border payments channel,” the IMF stated, noting that stablecoins are helping to reduce longstanding frictions in international transactions while simultaneously challenging existing monetary and regulatory frameworks.
According to the report, the appeal of stablecoins lies largely in their speed, accessibility and relatively lower transaction costs. Users can send or receive funds within minutes using a smartphone and internet connection, often at costs significantly below those charged by conventional remittance providers.
For many Nigerians, particularly those with limited access to formal banking services, stablecoins have become a practical alternative for receiving remittances, paying foreign suppliers and preserving value amid economic uncertainty.
The IMF highlighted broader global factors supporting the growth of stablecoins, noting that their relative price stability, ease of transfer and widespread use within digital asset markets have made them increasingly attractive as settlement instruments.
The report pointed out that stablecoins are also gaining popularity in remittance markets, where transaction costs remain persistently high. The World Bank estimates that sending $200 to sub-Saharan Africa costs around nine percent of the transaction value, considerably higher than the global average of six percent.
Domestic economic pressures have further accelerated adoption in Nigeria. The IMF said the depreciation of the naira, elevated inflation levels and restricted access to foreign exchange during 2023 and 2024 strengthened demand for dollar-linked assets.
In response, many individuals and businesses turned to stablecoins as both a hedge against currency volatility and a mechanism for conducting international transactions.
The report also linked the growth of alternative crypto payment channels to regulatory developments. Following the Central Bank of Nigeria’s directive in February 2021 restricting banks from facilitating cryptocurrency-related transactions, much of the activity migrated to peer-to-peer platforms and other less regulated channels.
Despite acknowledging the benefits associated with stablecoin adoption, the IMF warned that rapid growth in their use presents significant policy challenges.
Among the concerns raised is the risk of digital dollarisation. Since most stablecoins are denominated in U.S. dollars, widespread usage could reduce demand for the naira and weaken the effectiveness of domestic monetary policy.
The report further warned that financial integrity risks may increase as transactions move away from traditional banking institutions into digital wallets and cryptocurrency exchanges, where existing monitoring mechanisms may be less effective.
“The speed and anonymity of some platforms can also increase risks of illicit finance, including money laundering,” the IMF noted.
While these concerns are not unique to Nigeria, the Fund stressed that the country’s scale of adoption makes the risks more pronounced.
Rather than attempting to suppress stablecoin activity, the IMF argued that policymakers should focus on balancing innovation with effective risk management.
The institution outlined four key priorities for regulators.
The first is maintaining monetary stability through sound macroeconomic management. According to the IMF, a stable and credible domestic currency remains the most effective safeguard against excessive reliance on dollar-linked digital assets.
The second priority is strengthening regulatory oversight. The report acknowledged recent efforts by Nigerian authorities, including rules introduced by the Securities and Exchange Commission (SEC) for virtual asset service providers and guidance issued by the Central Bank of Nigeria regarding interactions between banks and digital asset firms.
However, it called for greater clarity regarding the regulation of stablecoin issuers and alignment with emerging global frameworks being developed in jurisdictions such as the European Union, Singapore, Hong Kong, Japan and the United States.
The third recommendation focuses on improving data collection and market visibility. The IMF said regulators require better insight into how stablecoins interact with the domestic financial system, including transactions involving conversions between the naira and stablecoins.
Enhanced monitoring, supported by blockchain analytics and reporting mechanisms, would enable authorities to identify emerging risks earlier and respond more effectively, the report noted.
Finally, the Fund urged continued investment in payment infrastructure to address the underlying gaps driving demand for stablecoins.
Nigeria has already made notable progress through its instant payment systems and participation in regional initiatives such as the Pan-African Payment and Settlement System (PAPSS). Expanding faster, cheaper and more interoperable cross-border payment networks could further reduce reliance on informal or unregulated alternatives.
The IMF emphasised that stablecoins should not be viewed either as a temporary phenomenon or as a replacement for traditional financial institutions.
Instead, the Fund described them as a market-driven response to persistent inefficiencies in cross-border payments, arguing that the challenge for policymakers is to close those gaps while ensuring financial stability and consumer protection.
