The IMF warns Nigeria’s growing stablecoin use could weaken monetary policy and oversight as crypto inflows reach $59B in one year.
Nigeria received approximately $59 billion in crypto-asset inflows between July 2023 and June 2024, according to an International Monetary Fund (IMF) report published June 16. The country has accounted for 60% of all stablecoin inflows across sub-Saharan Africa since 2019. Dollar-pegged tokens have grown from a niche product into a primary channel for cross-border transfers among households and small businesses
Conventional remittance services charge Nigerian senders an average of 9% of the transaction value to move $200 abroad, compared to a global average of 6%, according to World Bank data. Stablecoins have offered a faster and cheaper alternative. Smartphone access and digital wallets have made adoption easy to scale across income levels.
Scale of Stablecoin Risks Grows With Adoption
The IMF acknowledged that stablecoins support financial inclusion and lower the cost of international transfers. However, the report identified three specific risks that grow more serious as adoption expands. Those risks are reduced monetary policy effectiveness, weakened regulatory oversight, and greater exposure to illicit finance.
Widespread use of dollar-linked tokens could shrink demand for the naira and limit the central bank's ability to manage the money supply. The IMF described this dynamic as a "digital form of dollarization." Existing financial monitoring systems were not built to track stablecoin transactions, which creates gaps that can be exploited.
Attempts to ban or restrict stablecoin use would achieve only partial compliance, according to the report. The Fund recommended a pragmatic regulatory framework that permits innovation while addressing systemic vulnerabilities. It specifically argued against suppression-only strategies, warning they would drive activity further underground without resolving demand.
Related Article: What Are The Most Common Crypto-to-Fiat Pairs in Nigeria?
Blockchain Analytics Among Proposed Fixes
Specific proposals in the report include integrating blockchain analytics with reporting on naira-to-stablecoin conversions. The IMF also recommended investing in domestic payment infrastructure to reduce dependence on unregulated transfer channels. Nigeria's recent macroeconomic reforms and tighter monetary policy were cited as constructive steps toward protecting monetary sovereignty.
The Fund issued a comparable warning about Nepal the week of June 9, urging authorities to closely monitor crypto adoption amid concerns about capital outflows and the circumvention of financial controls. The IMF has maintained a consistent position that stablecoin growth in developing markets requires active policy responses. These two cases form part of a broader pattern of IMF scrutiny directed at crypto adoption in emerging economies.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
