The International Monetary Fund has warned that Nigeria’s explosive adoption of stablecoins and cryptocurrency, which drew approximately $59 billion in inflows in a single year between mid-2023 and mid-2024, risks becoming a conduit for money laundering and illicit financial activity if regulatory frameworks continue to lag behind the speed and volume at which digital assets were moving through the economy.
In a paper authored by IMF Mission Chief Axel Schimmelpfennig and economist Bo Zhao, the fund said financial activity that had historically flowed through regulated banks was migrating in growing volumes toward digital wallets and crypto exchanges whose transaction monitoring systems were not designed to flag the patterns that conventional bank surveillance would detect. It said the speed and partial anonymity of some platforms added further exposure.
Nigeria ranked second on the 2024 Chainalysis Global Crypto Adoption Index, sixth in 2025, and accounted for roughly 60 percent of all stablecoin inflows into sub-Saharan Africa since 2019. The fund said adoption had been driven by real economic demand, with households and businesses turning to dollar-pegged digital assets to send and receive remittances more cheaply and quickly, pay overseas suppliers, and protect savings from naira depreciation and high inflation.
Beyond illicit finance, the fund raised a structural concern: that widespread use of dollar-denominated stablecoins could amount to a digital form of currency substitution, gradually eroding demand for the naira and weakening the central bank’s ability to transmit monetary policy through the economy.
Rather than suppressing the technology, the IMF recommended four complementary responses: sustaining macroeconomic reforms to rebuild confidence in the naira as the most direct antidote to dollarization pressure; tightening regulatory oversight by clarifying rules around stablecoin issuers and aligning with emerging global standards; investing in blockchain analytics and stablecoin-to-naira conversion reporting to give regulators early warning of emerging risks; and improving conventional cross-border payment infrastructure to reduce the practical gaps that pushed users toward unregulated alternatives.
