The International Monetary Fund (IMF) has sounded an alarm over Nigeria's increasing use of stablecoins, warning that it could compromise the Central Bank of Nigeria's monetary control. The IMF notes that between July 2023 and June 2024, there was a massive inflow of $59 billion into crypto assets in Nigeria.
This surge is attributed to the depreciation of the naira and restrictive banking policies, which have driven people towards using stablecoins pegged to the US dollar as a preferred medium for transactions and savings. The IMF advises that while regulation is necessary to maintain oversight, outright suppression of stablecoins will only be partly effective.
Nigeria's regulatory shift towards managed integration rather than prohibition is also highlighted by the launch of the naira-pegged stablecoin cNGN. This development is expected to have a ripple effect on crypto regulation across Africa.