…urges CBN to sustain monetary policy reforms tightening
Gaps and persistent frictions within Nigeria’s traditional payment systems have accelerated the adoption of U.S. dollar-pegged stablecoins across the country, according to a report released Tuesday by the International Monetary Fund (IMF).
The Washington-based lender characterized the digital token boom as a practical but short-term workaround for households and small businesses looking to escape expensive cross-border transaction fees and currency depreciation.
The IMF emphasized that suppressing cryptocurrency usage will not work. Instead, it advised that the most sustainable solution is to upgrade domestic financial infrastructure while maintaining tight macroeconomic reforms.
The scale of cryptocurrency adoption in Nigeria has rapidly evolved from a niche trend into a core cross-border payments channel. Between July 2023 and June 2024 alone, Nigeria received an estimated $59 billion in crypto-asset inflows.
According to IMF staff calculations using data from Chainalysis, Nigeria accounts for roughly 60 percent of all stablecoin inflows into Sub-Saharan Africa since 2019. This staggering volume placed the country sixth globally on the 2025 Global Crypto Adoption Index.
The appeal of tokens like USDT and USDC remains straightforward for ordinary Nigerians. They bypass conventional banking rails, where the average cost of sending $200 to Sub-Saharan Africa sits at a steep 9 percent of the transaction value significantly higher than the global average of 6 percent.
Domestic economic pressures, including high inflation and the sharp depreciation of the naira following its flotation, further fueled the appetite for dollar-linked digital assets as a financial hedge.
The IMF explicitly tied the explosive growth of these unregulated channels to structural deficiencies in Nigeria’s payment ecosystem. It noted that the rush toward digital wallets reflects significant gaps in the speed, cost, and interoperability of formal banking networks.
While acknowledging Nigeria’s internal progress with instant domestic bank transfers and its participation in regional frameworks like the Pan-African Payment and Settlement System (PAPSS), the IMF stated that current cross-border infrastructure remains inadequate.
Relying on stablecoins as a primary financial bridge creates a major policy trade-off, shifting transactions away from monitored bank intermediaries and heightening the risk of illicit finance and money laundering.
The global lender warned that widespread adoption of dollar-backed stablecoins poses a direct threat to Nigeria’s monetary sovereignty, acting as a form of digital dollarization. By depressing demand for the local currency, it risks weakening the transmission and effectiveness of the Central Bank of Nigeria’s (CBN) monetary policies.
To counteract this, the IMF declared that the absolute best defense against digital dollarization is a stable, credible domestic currency.
It commended the recent macroeconomic reforms and aggressive monetary tightening implemented by the CBN, noting they have successfully started to restore confidence in the naira.
The IMF urged the central bank to firmly sustain these tightening measures, warning that any premature relaxation could undo recent gains.
The IMF also advised Nigerian regulatory bodies to bridge the data gap by combining blockchain analytics with banking reports on naira-to-stablecoin conversions to catch emerging systemic risks early.