The International Monetary Fund (IMF) has warned that the rapid expansion of stablecoin usage in Nigeria could significantly weaken demand for the naira and reduce the effectiveness of domestic monetary policy.

This is coming as the country recorded about $59 billion in crypto-asset inflows between July 2023 and June 2024.

The IMF said in it’s report titled “Stablecoins in Nigeria: A Growing Cross-Border Channel,” that the growing adoption of dollar-pegged digital assets for payments, remittances, and savings reflects deeper macroeconomic pressures in Nigeria, including elevated inflation, foreign exchange scarcity, and persistent currency depreciation.

According to the Fund, these conditions have increased the attractiveness of stablecoins as both a store of value and a medium of exchange, particularly among individuals and businesses seeking stability amid exchange rate volatility.

The IMF warned that the widespread use of U.S. dollar-denominated stablecoins effectively represents a form of “digital dollarisation,” which could erode demand for the naira and weaken the Central Bank of Nigeria’s (CBN) ability to transmit monetary policy through interest rates and exchange rate interventions.

Nigeria remains one of the world’s most active digital asset markets, ranking second globally in Chainalysis’ 2024 Global Crypto Adoption Index and sixth in the 2025 edition.

The IMF further noted that the country accounts for nearly 60 per cent of stablecoin inflows into sub-Saharan Africa since 2019, underscoring its dominant role in regional crypto activity.

The report also highlighted the appeal of stablecoins in reducing transaction costs and improving the speed of cross-border payments.

However, the IMF cautioned that the increasing shift of payment activity from traditional banking systems to crypto exchanges and digital wallets may create regulatory blind spots.

It warned that such developments could complicate the monitoring of capital flows and increase exposure to illicit financial risks, including money laundering.

Despite these concerns, the Fund did not advocate restrictive measures. Instead, it called for a balanced policy approach that addresses the structural drivers of stablecoin adoption while strengthening oversight frameworks.

Key recommendations include maintaining macroeconomic stability to support the naira, enhancing regulatory clarity for stablecoin-related activities, and strengthening coordination between the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC).

The IMF also urged improved transaction data collection through blockchain analytics and continued investment in efficient, regulated payment infrastructure.

The Fund noted that stablecoin growth is largely driven by inefficiencies in cross-border payment systems, stressing that policy efforts should focus on narrowing these gaps while ensuring emerging risks remain effectively contained.

VeendHQ has said that its AI-powered credit platform, Vida AI, helped recover N69 million from a N172.5 million portfolio of loans that were more than 90 days overdue, in a pilot that highlights the growing role of technology in loan recovery and portfolio management.

The result comes at a time when lenders are under increasing pressure to improve recovery outcomes while managing the cost, reputational risk, and operational burden associated with overdue loans.

For many credit providers, the challenge is no longer only how quickly loans can be approved, but how effectively repayment can be monitored and delinquent loans can be recovered after disbursement.

According to VeendHQ, the pilot delivered a 40 percent recovery rate on the overdue loan portfolio.

The company said the result significantly outperformed traditional recovery benchmarks, where a five percent recovery rate on a similar loan book would amount to about N8.6 million.

VeendHQ said the pilot demonstrates how Vida AI can support lenders beyond credit assessment, extending into repayment monitoring, collections, and recovery.

“Credit access is only one side of lending. The bigger challenge for many lenders is what happens after disbursement,” said Olufemi Olanipekun, co-founder and CEO of VeendHQ.

“Vida AI helps lenders make smarter decisions across the credit lifecycle, from approval to repayment and recovery.”

VeendHQ, a Nigerian fintech company building digital credit infrastructure, developed Vida AI as an artificial intelligence-powered platform for lenders, merchants, and financial institutions.

The platform supports credit assessment, identity verification, repayment collections, and loan management workflows.

With the recovery pilot, the company is positioning Vida AI beyond loan origination, as a tool for lenders seeking to improve repayment performance and manage overdue portfolios more efficiently.

Delinquent loans remain a major cash-flow challenge for lenders.

Once loans exceed 60 to 90 days past due, recovery becomes more difficult, expensive, and unpredictable. Traditional approaches such as manual calls, recovery agents, and legal escalation often increase costs without significantly improving recovery rates.

VeendHQ said Vida AI’s recovery workflow enables lenders to upload overdue loan records, verify borrower information, assess repayment capacity, and trigger automated recovery actions.

This gives lenders better visibility after disbursement and allows recovery teams to prioritize overdue portfolios more effectively.

“If lenders cannot recover efficiently, they become more conservative with lending. That affects consumers, small businesses, and the wider credit market,” Olanipekun said.

“Better recovery infrastructure gives lenders more confidence to lend, manage risk, and keep credit flowing.”

The company said the recovery use case is especially relevant for banks, microfinance institutions, digital lenders, cooperatives, and merchants managing loans that are 60 to 180 days past due.

It added that it plans to deepen Vida AI’s recovery capabilities for credit providers seeking to improve recovery performance without relying solely on manual methods.

“As lending expands across Nigeria and Africa, recovery infrastructure is becoming as critical as origination,” Olanipekun said. “Tools that improve both will define which lenders can scale sustainably.”

The pilot, VeendHQ says, points to a broader shift in the credit market: approval speed alone is no longer enough. Increasingly, lenders will be defined by how effectively they monitor repayment, recover overdue loans, and manage portfolio risk over time.

The MTN Foundation has disclosed that it has committed more than N32 billion to social intervention programmes across Nigeria.

It said over 32 million people benefited from the scheme since its establishment in 2004.

The interventions, it noted, have reached thousands of communities nationwide through initiatives focused on education, healthcare, youth development and economic empowerment.

Speaking at the Anti-Substance Abuse Programme (ASAP) stakeholders’ conference in Ilorin, Joseph Akpata, Kwara State Manager, Development Portfolio, said the organisation has sustained its commitment to improving lives through impactful and measurable investments.

According to him, the foundation was created as the corporate social investment vehicle of MTN Nigeria and has continued to implement programmes designed to address critical social and developmental challenges.

“Since we started in 2004, we have invested over N32 billion in impactful projects across the country, and we have been keeping our records,” Akpata said.

He stated that the foundation’s interventions have so far impacted more than 32 million people in over 30,000 communities and scores of local government areas across the federation.

Akpata noted that the fight against substance abuse among young people remains a major priority for the organisation, prompting the launch of the Anti-Substance Abuse Programme in 2019.

He explained that the initiative was designed to reduce the number of first-time drug users through sustained advocacy, awareness campaigns and educational interventions targeted at young Nigerians.

“Our goal for the Anti-Substance Abuse Programme is to contribute to reducing the number of first-time users of drugs and other substances through advocacy, education and empowerment programmes,” he said.

The MTN Foundation official revealed that the programme has already reached more than 50,400 students across Nigeria, while over 1,500 teachers have received specialised training to support the campaign.

Mrs Mosun Belo-Olusoga, chairperson of the MTN Foundation, said the organisation remains committed to safeguarding the future of young Nigerians by equipping them with the knowledge and support needed to make informed choices.

Represented by Valentina Obayemi, she said the foundation’s belief in the potential of Nigeria’s youth inspired the launch of the anti-substance abuse initiative and continues to shape its interventions.

“This year, we are taking our message directly to 50 public secondary schools across 10 states and the Federal Capital Territory, reaching more than 20,000 students at a critical stage in their lives where the right information can shape their future,” she said.

Belo-Olusoga added that the foundation plans to train 250 additional teachers to identify, support and guide students participating in drug education and quiz competition programmes.

She said the intervention is also being extended beyond secondary schools through increased engagement with tertiary institutions and grassroots advocacy platforms.

According to her, the foundation is strengthening its partnership with the National Youth Service Corps to widen awareness campaigns while continuing support for the National Drug Law Enforcement Agency’s 24-hour toll-free psychosocial support helpline.

She noted that the collaboration is aimed at ensuring individuals battling substance abuse can access professional assistance and counselling whenever needed.