Market News

The rapid adoption of U.S. dollar-pegged stablecoins by Nigerian households and businesses is transforming cross-border payments and challenging the country’s monetary and regulatory frameworks, according to the International Monetary Fund (IMF). 

In its latest Article IV consultation report on Nigeria, the IMF said stablecoins have evolved from a niche digital asset into a major channel for remittances, trade payments and wealth preservation, driven by persistent foreign exchange constraints, naira volatility and rising demand for faster, cheaper international transactions. 

The scale of adoption has been remarkable. 

Nigeria received approximately $59 billion in crypto-asset inflows between July 2023 and June 2024 and ranked second globally on Chainalysis’ 2024 Global Crypto Adoption Index before slipping to sixth position in 2025. Within sub-Saharan Africa, the country accounts for about 60 per cent of all stablecoin inflows since 2019, highlighting its dominant role in the region’s digital asset ecosystem. 

According to the IMF, stablecoins are increasingly being used by households receiving remittances and by small businesses making payments to overseas suppliers, offering an alternative to traditional banking channels that are often slow, costly and difficult to access. 

“Stablecoins allow users with a smartphone and internet access to receive remittances or make cross-border payments in minutes, often at lower cost than traditional channels,” the Fund noted. 

The appeal is particularly strong in Africa, where the average cost of sending $200 to sub-Saharan Africa remains around nine per cent of the transaction value, significantly higher than the global average of six per cent. 

In Nigeria, domestic economic conditions have accelerated adoption. The sharp depreciation of the naira in 2023 and 2024, elevated inflation and difficulties accessing foreign exchange encouraged individuals and businesses to seek dollar-linked assets as a store of value and means of payment. 

The trend intensified after the Central Bank of Nigeria (CBN) restricted banks from facilitating cryptocurrency transactions in 2021, pushing activity towards peer-to-peer platforms and other less regulated channels. 

While acknowledging the benefits of stablecoins, including cheaper remittances, improved financial inclusion and more efficient cross-border trade, the IMF warned that their growing popularity could create significant policy challenges.