Crypto is exploding in Nigeria. The IMF warns: unchecked growth could destabilize the naira, fuel fraud, and drain capital.
The IMF has raised concerns over Nigeria’s growing use of crypto for cross-border transactions, warning it poses serious risks to capital flow controls, monetary stability, and regulatory enforcement.
According to the IMF’s latest country report, Nigeria ranked among the world’s top three crypto adopters, with over $59 billion in transactions between July 2023 and June 2024. The global market grew 1,511% over five years, from $211 billion to $3.4 trillion.
Key threats cited include:
||FX disruption: Crypto inflows bypass formal channels, weakening reserves and driving naira volatility.
||Revenue loss: Untaxed crypto gains mean missed fiscal opportunities.
||Policy erosion: High crypto volume limits the Central Bank’s control over inflation and interest rates.
||Illicit use: Nigeria tops global crypto fraud growth (+1,056%) and remains on FATF’s grey list.
To address this, the SEC has rolled out key reforms:
1. cNGN Stablecoin: Launched to offer a regulated digital alternative.
2. VASPs Regulation: Mandatory licensing, reporting, and physical presence for all crypto platforms.
3. Blockchain Integration: Enhances transparency in capital markets.
4. Crypto Education Campaign: Aims to improve investor awareness and compliance.
The IMF recommends a nine-part framework with 37 actions, including capital flow safeguards, interagency coordination, global regulatory alignment, tax clarity, and investment in secure digital infrastructure.
As Nigeria’s crypto usage accelerates, the IMF urges immediate policy action to prevent systemic risks and financial instability.
Discover more from DiutoCoinNews
Subscribe to get the latest posts sent to your email.
