IMF Warns Nigeria Stablecoin Surge Risks Monetary Sovereignty

The International Monetary Fund warned that Nigeria's rapid adoption of U.S. dollar-denominated stablecoins risks undermining monetary sovereignty and accelerating digital dollarization. According to the IMF, Nigeria has become a regional hub, accounting for approximately 60% of stablecoin inflows in sub-Saharan Africa, with roughly $59 billion in cryptocurrency inflows recorded between July 2023 and June 2024.

Nigerian households and small businesses increasingly use these digital tokens for cross-border transfers and as a hedge against the volatile naira, favoring them over traditional remittance channels. The IMF cautioned that this trend reduces demand for the naira and increases risks of capital flight and illicit finance. To mitigate these systemic risks, the organization urged the Nigerian government to implement stricter regulatory perimeters through enhanced licensing, reporting, and market surveillance.

In its 2026 Article IV Consultation Report, the IMF also alleged that the Central Bank of Nigeria engaged in Multiple Currency Practices through specific foreign exchange purchase rates and commissions. The Central Bank of Nigeria rejected these claims, asserting that its charges are standard market-making and cost-recovery mechanisms. Additionally, IMF recommendations to increase Value Added Tax faced criticism from local academics who argued such fiscal measures would worsen the current cost-of-living crisis.