The International Monetary Fund (IMF) has issued a five-point plan to address potential risks associated with the growing adoption of dollar-based stablecoins, warning that the trend could weaken monetary policy and accelerate dollarisation in economies, including Nigeria.
The IMF said that while dollar-based stablecoins provide seamless access to foreign currencies, increase competition in retail digital payments and reduce cross-border payment costs, they could also accelerate dollarisation, increase capital flow volatility and put pressure on exchange rates.
“Dollarisation can have long-term macroeconomic consequences,” Dan Katz, IMF first deputy managing director, said in a statement on Friday. “While households benefit from access to dollars, once entrenched, dollarisation tends to be highly persistent, even after the conditions that triggered it have subsided.”
The IMF’s concerns about the potential risks posed by stablecoins come as many Nigerians have increasingly adopted dollar-backed digital assets for online purchases, international transactions and as a hedge against naira depreciation.
The growing adoption of stablecoins has raised concerns among policymakers who are evaluating the benefits of digital assets against fears that they could undermine financial stability.
Mr Katz added that stablecoins could allow users to bypass governments’ capital flow management measures through messaging apps and smartphones, making the effects of dollarisation long-lasting and constraining monetary policy space.
“Capital flows could become more volatile, as stablecoins may make it easier to circumvent capital flow management measures (CFMs) that were designed for regulated intermediaries,” he said.
To address the emerging risks and safeguard financial stability, Mr Katz recommended a strong and credible monetary policy, sustainable fiscal positions, and efficient domestic payment systems to minimise the demand for foreign-currency stablecoins.
He called on governments to close data gaps by improving the collection of cross-border stablecoin flows, citing the South African Reserve Bank’s collation of custody data, which it said gave the country insight into the market structure through direct engagements with major crypto exchanges.
“Policy tools depend on data,” he said. “CFMs, for example, cannot be calibrated without knowing the volume and direction of flows.”
Mr Katz called on policymakers to ensure “comprehensive regulation, supervision, and oversight of crypto-asset activities”, adding that “existing CFMs were designed around traditional financial institutions. That is no longer sufficient.”
He also suggested that governments should tailor their policy responses to how stablecoins are utilised.
Mr Katz noted that stablecoin adoption could shift financial intermediation and create bank funding risks, adding: “A one-size-fits-all response would risk over-regulating in one context and under-responding in the other.”
The IMF official cited reports indicating gaps in cross-border cooperation and said that addressing them “will be critical for the effective supervision of global stablecoins and the service providers that facilitate access to them.”
According to him, market capitalisation of stablecoins nearly tripled between 2021 and 2025 to nearly $300 billion but has remained unchanged over the last year. He said that about 99 per cent of stablecoins are denominated in U.S. dollars.
Citing sources, Mr Katz said that stablecoin transaction volume surged above $30 trillion in 2025, of which $6.1 trillion was cross‑border.