Nigeria Crypto Inflows Hit $59bn as IMF Warns on Stablecoins

Nigeria received about $59 billion in crypto asset inflows between July 2023 and June 2024, according to data cited by the International Monetary Fund, as stablecoins become a major channel for remittances, trade payments, and wealth preservation in the country.

The IMF said Nigeria has become one of the largest crypto markets in the world, with widespread use of dollar backed stablecoins by households, small businesses, traders, and digital asset users seeking faster and cheaper cross border transactions.

Stablecoins are digital tokens designed to maintain a stable value, usually by being linked to a currency such as the United States dollar. In Nigeria, they are increasingly used through smartphones, digital wallets, peer to peer platforms, and crypto exchanges.

According to the IMF, Nigeria ranked second globally in Chainalysis’ 2024 Global Crypto Adoption Index and sixth in the 2025 ranking. The Fund also said Nigeria accounts for about 60 percent of stablecoin inflows into sub Saharan Africa since 2019.

The figures place Nigeria at the centre of Africa’s digital asset economy and show how crypto based payment channels have expanded beyond investment and speculation into everyday financial activity.

The IMF said Nigerian households and small firms are using stablecoins to move money across borders, receive remittances, pay foreign suppliers, and store value in dollar linked assets. It said the growth of stablecoin use has reduced some long standing frictions in cross border payments, but has also created new policy and regulatory challenges.

The Fund said the use of stablecoins in Nigeria grew partly because of domestic economic conditions. These include high inflation, depreciation of the naira, and limited access to foreign exchange through official channels.

In 2023 and 2024, the naira weakened sharply after foreign exchange reforms and wider macroeconomic adjustments. The depreciation increased demand for dollar linked assets among users seeking to protect savings or settle foreign obligations.

The IMF said stablecoins became attractive because they allow users with internet access and digital wallets to complete cross border payments within minutes. This is different from some traditional remittance and banking channels, which can involve higher fees, delays, documentation requirements, and limited access for people outside the formal banking system.

The Fund also cited World Bank data showing that the average cost of sending $200 to sub Saharan Africa is about 9 percent of the transaction value, compared with a global average of 6 percent. Stablecoins are being used by some Nigerians as an alternative channel because transactions can be faster and cheaper than conventional remittance routes.

Stablecoins are also used by small businesses that need to pay overseas suppliers. Import dependent traders and service providers often require dollar liquidity for international payments. Where access to formal foreign exchange is constrained, some users turn to dollar backed digital assets.

The IMF said stablecoins now act as a bridge between crypto markets and the traditional financial system. Users can hold value in digital dollars, transfer funds across borders, and convert between naira and stablecoins through exchanges or peer to peer markets.

Chainalysis has also reported that stablecoins are a major part of Nigeria’s crypto activity. In its 2024 assessment of sub Saharan Africa, the blockchain data company said stablecoins formed a large part of Nigeria’s crypto economy and were widely used for cross border transfers. It also said stablecoin value in Nigeria approached $3 billion in the first quarter of 2024 for transactions below $1 million.

The Central Bank of Nigeria had restricted banks from servicing crypto exchanges in February 2021. After that restriction, a large part of crypto activity moved to peer to peer channels. In December 2023, the CBN issued new guidelines allowing financial institutions to operate accounts for virtual asset service providers licensed by the Securities and Exchange Commission

The CBN said the guidelines were introduced because of the growing influence of virtual assets and their potential effect on monetary and financial stability.

The Securities and Exchange Commission also moved to bring digital asset firms under regulatory supervision. In June 2024, the SEC released its Accelerated Regulatory Incubation Programme framework for virtual asset service providers and digital investment service providers operating in Nigeria or offering services to Nigerian consumers.

Under the framework, virtual asset firms are expected to register with the SEC and undergo regulatory assessment before full approval. The programme was designed to bring operators into a supervised structure while the regulator continues to develop broader digital asset rules.

The IMF said Nigeria has taken steps toward stronger oversight through SEC rules for virtual asset service providers and CBN guidance on how banks may interact with licensed digital asset firms.

However, the IMF said the rapid use of stablecoins still creates policy concerns.

One of the concerns identified by the Fund is monetary sovereignty. Since most stablecoins used in Nigeria are linked to the United States dollar, wide adoption can resemble a digital form of dollarisation. This can reduce demand for the naira and weaken the transmission of domestic monetary policy.

The IMF said when more transactions move from naira based channels into dollar backed digital assets, it can become harder for monetary policy decisions to influence domestic financial behaviour.

The Fund also raised concerns about financial integrity. It said activity that previously moved through banks is increasingly moving through digital wallets and crypto exchanges. Traditional monitoring systems may not capture all of these flows.

The IMF said the speed and anonymity of some platforms can increase the risk of illicit finance, including money laundering.

The IMF did not say that Nigeria should ban stablecoins. It said attempts to suppress stablecoin use are likely to be only partly effective. The Fund said a more durable approach would allow innovation while managing risks.

It identified four policy priorities for Nigeria.

The first is monetary stability. The IMF said a stable and credible domestic currency remains the strongest defence against digital dollarisation. It said Nigeria’s recent macroeconomic reforms and tighter monetary policy have helped restore confidence in the naira, and that sustaining this progress will be important.

The second priority is stronger oversight. The IMF said Nigeria should clarify the treatment of stablecoin issuers and align domestic rules with emerging international frameworks. It referred to regulatory developments in the European Union, Singapore, Hong Kong, Japan, and the United States, while noting that Nigeria’s rules should be adapted to local conditions.

The third priority is better data. The IMF said regulators need clearer information on how stablecoins are used, especially at the point where they connect with the domestic financial system. It said blockchain analytics, combined with reporting on naira to stablecoin conversions, could help regulators identify risks earlier.

The fourth priority is improved payment infrastructure. The IMF said much of the demand for stablecoins reflects gaps in existing payment systems. It noted that Nigeria has made progress through instant domestic payments and participation in the Pan African Payment and Settlement System. It said further investment in faster, cheaper, and more interoperable cross border payment systems could reduce reliance on unregulated channels.