The International Monetary Fund (IMF) warns that the rising use of US dollar stablecoins could badly hurt the demand for the Nigerian naira. In its latest report, the global lender said that these digital assets speed up “digital dollarization”. This shift makes it harder for the central bank to control the local economy and keep prices stable.
Nigeria is a major hub for stablecoin inflows in sub-Saharan Africa. Scale brings benefits but also creates risks. IMF analysis identifies four priorities: safeguard monetary stability, strengthen oversight, improve data & upgrade payment infrastructure.https://t.co/tIFUEkd64N pic.twitter.com/jeu10lTTaA
— IMF Africa (@IMFAfrica) June 16, 2026
Widespread stablecoin adoption fuels currency substitution
Nigeria launched the eNaira, Africa’s first central bank digital currency (CBDC), to boost financial inclusion and reduce transaction costs. However, regular citizens have been slow to adopt it due to a general lack of trust and minimal use among local shops.
Instead, many Nigerians have turned to dollar-pegged stablecoins like USDT to protect their savings from inflation. This sudden shift has raised concerns about the country’s control over its own monetary policy.
To manage this, the central bank and securities regulators are building a joint framework to license stablecoin providers and track transactions. This strategy aims to support modern digital payments while keeping the financial system safe.
Regulators push for tighter oversight and infrastructure upgrades
According to reports, Nigeria takes in about 60% of all stablecoin funds entering sub-Saharan Africa. Local families and small businesses use dollar-backed crypto like Tether (USDT) to protect their cash from high inflation and a falling naira. They also use them to pay for goods from abroad.
Past government bans on big crypto platforms did not stop this trend. Instead, the rules forced users onto peer-to-peer networks. These networks are much harder for the government to track. This shift also means fewer people keep their money in local banks.
“Stablecoins have turned into a parallel banking system for emerging markets,” said market analyst Benjamin Cowen. “When people choose digital dollars over the local currency, the central bank loses its power to fight inflation.”
The IMF wants Nigeria to set up clearer rules for digital asset firms. It says the government should make these firms report large transfers. It also wants Nigeria to build better public payment systems to give people a cheaper, legal way to send money across borders.
Meanwhile, new tax rules in Nigeria now link crypto platforms to user ID records (TIN and NIN). This allows authorities to track trading history and ensure traders declare their digital asset profits, making tax avoidance harder. Additionally, a DogPay report notes that cryptocurrency and AI are helping Nigerians bypass local challenges, creating new opportunities in online work and content creation.
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