Nigeria has become ground zero for stablecoin adoption in sub-Saharan Africa, and the International Monetary Fund is not exactly celebrating. In its June 2026 Article IV consultation, the IMF flagged what it calls “pronounced” risks stemming from the country’s rapid embrace of dollar-pegged stablecoins, warning that the trend could erode monetary sovereignty and sideline the traditional banking sector.

Nigeria accounts for roughly 60% of all stablecoin inflows across sub-Saharan Africa since 2019.

The numbers behind the warning

From July 2023 to June 2024, approximately $59 billion in crypto assets moved into the country. Of that, around $22 billion consisted of stablecoin transactions specifically.

Nigeria ranked second globally in crypto adoption according to the 2024 Chainalysis index.

The IMF’s dedicated analysis, dated June 16, identifies USD-pegged stablecoins as having evolved into a significant channel for cross-border payments. The drivers aren’t mysterious: the naira experienced substantial depreciation through 2023 and 2024, traditional remittance fees remain punishing, and access to formal foreign exchange markets is limited for many Nigerians.

Sending $200 to sub-Saharan Africa through traditional channels costs about 9% on average. The global average sits at 6%.

The IMF compared the phenomenon to “digital dollarization,” warning that when a significant chunk of economic activity migrates to dollar-denominated digital assets, the tools that central banks use to manage inflation, interest rates, and liquidity start to lose their grip.

Why Nigerians turned to stablecoins

In February 2021, the Central Bank of Nigeria imposed restrictions on banks dealing with crypto. By pushing crypto activity away from formal banking channels, the restrictions drove users toward peer-to-peer platforms and decentralized exchanges. Stablecoins became the preferred instrument because they offered the stability of the dollar without requiring a bank account denominated in foreign currency.

Nigeria’s Securities and Exchange Commission authorized a local stablecoin called cNGN in early 2025. Before that, the Central Bank of Nigeria launched the eNaira, its central bank digital currency, back in 2021. The eNaira hasn’t gained the traction that dollar-pegged stablecoins have, as a CBDC denominated in naira still carries the same depreciation risk as the naira itself.

What the IMF wants Nigeria to do

The IMF’s recommendations focus on three pillars: strengthen regulatory oversight, improve data collection using blockchain analytics, and upgrade payment infrastructure to compete with stablecoins on speed and cost. The Fund also suggested alignment with international standards, specifically pointing to the EU’s MiCA framework as a model.

Banking sector disintermediation is the other risk the IMF highlighted. If people are holding and transacting in stablecoins rather than keeping deposits in local banks, those banks have less capital to lend. Capital flow volatility is an additional concern, as stablecoin transactions can move large sums across borders quickly and with less visibility than traditional banking channels.