Nigeria received approximately US$59 billion in crypto-asset inflows between July 2023 and June 2024, making it one of the world's largest crypto-inflow markets, according to an IMF Country Focus article published Tuesday.
The report, authored by IMF economists Axel Schimmelpfennig and Bo Zhao, examines the rapid growth of U.S. dollar-pegged stablecoins as a cross-border payments channel in Africa's largest economy. The authors said stablecoins are easing long-standing frictions in cross-border transactions while testing the limits of existing monetary and regulatory frameworks.
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. For remittances to sub-Saharan Africa, the average cost of sending US$200 remains around 9 percent of the transaction value, well above the global average of 6 percent, the IMF said.
Domestic economic conditions have accelerated adoption. Between 2023 and 2024, the sharp depreciation of the naira, high inflation, and constrained access to foreign exchange increased demand for dollar-linked assets, the report said. Stablecoins offered a hedge against currency risk and a tool for paying overseas suppliers.
After the Central Bank of Nigeria restricted banks from servicing crypto exchanges in February 2021, activity shifted to less regulated channels, notably peer-to-peer platforms, according to the IMF.
The growth of stablecoin usage presents clear benefits — faster, cheaper cross-border payments that can support trade, remittances, and financial inclusion — but also raises several policy concerns, the report noted.
A primary concern is monetary sovereignty. The IMF authors said widespread use of dollar-denominated stablecoins can resemble digital dollarization, reducing demand for the local currency and weakening the transmission of domestic monetary policy.
Potential risks also include illicit finance and consumer protection gaps, the report said, alongside the need for clearer regulatory frameworks and improved payment infrastructure to support legitimate cross-border transactions while safeguarding financial integrity.
Sources: IMF, Reuters, World Bank remittance data.
