Stablecoins Erode Naira Dominance in Nigeria
The naira has found a worthy rival in stablecoins, which have taken the Nigerian market by storm. According to the IMF's 2026 Article IV consultation on Nigeria, between July 2023 and June 2024, Nigeria received approximately $59 billion in crypto-asset value.
Stablecoins accounted for more than 65 percent of crypto inflows in 2024, with Nigeria representing around 60 percent of all stablecoin inflows into Sub-Saharan Africa between late 2019 and early 2025.
The two dollar-denominated tokens that dominate Nigeria's stablecoin market are Tether (USDT) and USD Coin (USDC), both issued by reputable companies: Circle for USDC and Tether for USDT. The IMF notes that these coins are backed by highly liquid reserve assets, including short-dated U.S. government securities and cash held with regulated financial institutions.
The market operates through two channels: mainstream platforms and peer-to-peer (P2P) trading. On P2P platforms, individuals transact directly with each other, with the platform holding escrowed stablecoins until payment is confirmed. This structure protects sellers but leaves buyers vulnerable to counterparty risk.