By – Axel Schimmelpfennig & Bo Zhao, IMF
Lagos, June 19, 2026 – Nigerian households and small firms are moving money across borders in a new way—via smartphones, digital wallets, and U.S. dollar-pegged crypto assets known as stablecoins.
What began as a niche technology has evolved into a significant channel for cross-border payments. Its rapid growth is helping to ease long-standing frictions in international transactions while simultaneously testing the limits of existing monetary and regulatory frameworks.
The scale of adoption
The scale of stablecoin adoption in Nigeria is striking, even though measurement remains imperfect.
Nigeria received approximately $59 billion in crypto-asset inflows between July 2023 and June 2024. The country ranked second globally on Chainalysis’s 2024 Global Crypto Adoption Index and sixth in 2025.
Within sub-Saharan Africa, Nigeria accounts for roughly 60 percent of stablecoin inflows since 2019. Stablecoins now form a critical bridge between crypto markets and the traditional financial system, according to analysis contained in the IMF’s latest annual economic assessment of Nigeria (Article IV Report, Annex VIII).
Why stablecoins have taken hold
The appeal of stablecoins is straightforward. They allow users with a smartphone and internet access to receive remittances or make cross-border payments within minutes, often at a lower cost than traditional channels. For households and small businesses with limited access to formal banking services, stablecoins have become a practical alternative.
Global factors have also contributed to their growing adoption. Stablecoins are relatively stable in value, easy to transfer, and widely used as settlement assets within crypto markets. They facilitate trading between exchanges and provide a convenient store of liquidity.
For remittances, stablecoins can significantly undercut conventional channels. According to the World Bank, the average cost of sending US$200 to sub-Saharan Africa remains around 9 percent of transaction value, considerably higher than the global average of 6 percent.
Domestic conditions in Nigeria have further accelerated adoption.
During 2023 and 2024, the sharp depreciation of the naira, elevated inflation, and limited access to foreign exchange increased demand for dollar-linked assets. Stablecoins offered both a hedge against currency risk and a tool for paying overseas suppliers.
Following the Central Bank of Nigeria’s decision in February 2021 to restrict banks from servicing crypto exchanges, activity shifted toward less regulated channels, particularly peer-to-peer platforms.
Policy trade-offs
The rise of stablecoins presents clear advantages. Faster and cheaper cross-border payments can support trade, remittances, and financial inclusion.
However, these same features raise important policy concerns.
Monetary Sovereignty
Because stablecoins are typically denominated in U.S. dollars, widespread adoption could resemble a digital form of dollarization. By reducing demand for the local currency, it may weaken the effectiveness of domestic monetary policy.
Financial integrity risks
Activity that previously flowed through banks is increasingly moving to digital wallets and crypto exchanges. Monitoring systems designed for traditional intermediaries may not effectively capture these transactions.
Additionally, the speed and relative anonymity of some platforms can increase the risk of illicit financial activities, including money laundering.
These risks are not unique to Nigeria, but the country’s scale of adoption makes them particularly significant.
A Pragmatic Policy Response
According to the IMF, attempts to suppress stablecoin usage are likely to be only partially effective. A more sustainable approach is to permit innovation while managing the associated risks.
The IMF identifies four key priorities:
Safeguard Monetary Stability
The most effective defence against digital dollarization is a stable and credible domestic currency.
Nigeria’s recent macroeconomic reforms and tighter monetary policy have helped restore confidence in the naira. Sustaining this progress will be critical.
Strengthen Regulatory Oversight
Nigeria has already taken steps in this direction, including the Securities and Exchange Commission’s rules for virtual asset service providers and Central Bank of Nigeria guidance governing their interaction with banks.
The next phase involves clarifying the treatment of stablecoin issuers and aligning domestic regulations with emerging international frameworks in jurisdictions such as the European Union, Singapore, Hong Kong SAR, Japan, and the United States, while adapting them to local conditions.
Improve data collection
Policymakers need greater visibility into how stablecoins are being used, particularly where they intersect with the domestic financial system.
Combining blockchain analytics with reporting on naira-to-stablecoin conversions could help regulators identify risks earlier and respond more effectively.
Upgrade payment infrastructure
Much of the demand for stablecoins reflects gaps in existing payment systems.
Nigeria has made progress through instant domestic payments and participation in regional initiatives such as the Pan-African Payment and Settlement System (PAPSS).
Further investment in faster, cheaper, and more interoperable cross-border payment systems could reduce reliance on unregulated channels.
An evolving financial landscape
Stablecoins are neither a passing trend nor a complete substitute for traditional finance.
They are best understood as a response to persistent frictions in cross-border payments. In Nigeria, those frictions remain real, and users have found a workaround.
The policy challenge is to narrow the gap that made the workaround attractive while ensuring that new risks remain contained.
Achieving this balance will require a clear strategy—one that remains open to innovation while anchored in sound macroeconomic policy and effective regulation.
Axel Schimmelpfennig is the IMF Mission Chief for Nigeria, while Bo Zhao is an economist in the IMF’s Strategy, Policy, and Review Department.
