IMF: Nigeria's stablecoin boom tests limits of monetary system

The International Monetary Fund (IMF) has stated that the rapid adoption of stablecoins in Nigeria is testing the limits of the country's existing monetary and regulatory frameworks, The Block reported. In a recent report, the IMF noted that Nigerian households and small businesses are increasingly using dollar-pegged stablecoins for remittances and international payments. This trend is driven by a sharp decline in the value of the local currency, the Naira, high inflation, and limited access to foreign exchange. The fund warned that the widespread use of dollar-based stablecoins could weaken demand for the Naira and undermine the effectiveness of monetary policy.