The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has warned that the rapid adoption of stablecoins and private digital payment platforms could increase foreign exchange volatility and weaken the effectiveness of monetary policy in emerging economies.
Cardoso made the comments on Thursday at the opening of the G-24 Technical Group Meeting in Abuja, delivering a keynote on “Digital Cross-Border Payments, Global Finance, and Economic Transformation – Opportunities and Risks.”
He cautioned that while digital financial innovations present opportunities to address inefficiencies in cross-border payments, they also pose risks, including currency substitution, fragmented payment systems, and regulatory loopholes.
“Without proper coordination, digital cross-border payments risk becoming fragmented across jurisdictions, reinforcing dominant currencies, reducing interoperability, raising costs, and undermining the ability of emerging and developing economies to protect monetary sovereignty,” Cardoso said.
He highlighted persistent challenges in cross-border transactions, noting that they remain slow, expensive, and fragmented, with global remittance corridors charging over 6 per cent in fees and experiencing settlement delays of several days, excluding millions of small businesses from global markets.
According to Cardoso, improving digital infrastructure—such as instant payments, interoperable platforms, distributed ledger technology, and digital identity systems—could reduce transaction costs, accelerate settlements, and enhance monetary policy transmission if implemented with strong governance.
He added that the CBN has taken steps to modernise Nigeria’s payment ecosystem, including enhanced oversight of switching and payment infrastructure providers, strengthened agent banking regulations to address anti-money laundering and counter-terrorism risks, and improved interoperability across payment channels.
Cardoso said the bank is finalising its Payment System Vision 2028 to foster innovation, resilience, and financial inclusion, with a particular focus on cross-border payments. He noted the launch of the National Payment Stack in June 2025, a real-time system built on ISO 20022 messaging to facilitate multi-currency and cross-border transactions.
The governor also highlighted reforms in the remittance sector, including the Non-Resident Nigerian Ordinary Account, Non-Resident Nigerian Investment Account, and Non-Resident BVN platform, which have contributed to average monthly remittance inflows of about $600 million, with a target of $1 billion in the near term.
Cardoso stressed that central banks must balance the modernisation of payment systems with the safeguarding of monetary and financial stability, adding, “The task before us is clear: To shape the future of global finance, rather than be shaped by it.”
He reaffirmed Nigeria’s commitment to working with G-24 members, the IMF, and the World Bank Group to build a more inclusive and resilient global financial system.
The warning echoes President Bola Tinubu’s earlier directive for financial authorities to closely monitor the growing use of stablecoins and digital currencies in Nigeria, highlighting emerging risks to the traditional banking system.
