The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has warned that the rising use of stablecoins and privately issued digital payment platforms could intensify foreign exchange volatility and weaken the effectiveness of monetary policy in emerging economies such as Nigeria.
Cardoso raised the concern on Thursday while delivering a plenary address at the opening of the G-24 Technical Group Meeting held in Abuja. His address, titled “Digital Cross-Border Payments, Global Finance, and Economic Transformation – Opportunities and Risks,” focused on the growing influence of digital finance on global and domestic economies.
According to the CBN governor, the rapid expansion of stablecoins and non-bank digital payment providers poses several risks, including currency substitution, reduced monetary policy transmission, increased pressure on foreign exchange markets, and regulatory fragmentation. He noted that these developments could undermine the ability of central banks in developing countries to maintain macroeconomic stability.
Cardoso acknowledged that digital innovation offers significant opportunities to address long-standing inefficiencies in cross-border payments but cautioned that poor coordination across jurisdictions could deepen global financial imbalances. He warned that without harmonised regulation, digital payment systems could become fragmented, strengthen the dominance of major global currencies, increase transaction costs and erode monetary sovereignty in Emerging Market and Developing Economies.
He observed that cross-border payments remain slow, expensive and inefficient, particularly for developing economies. Citing global data, Cardoso said remittance costs average above six per cent, with settlement delays stretching into several days and compliance requirements that often exclude micro, small and medium-sized enterprises from participating fully in international trade.
The CBN governor explained that such inefficiencies translate into higher remittance charges, costly foreign exchange transactions and limited access to global markets for local businesses. However, he noted that digital infrastructure—such as instant payment systems, interoperable platforms, distributed ledger technology and robust digital identity frameworks—could significantly reduce costs and settlement times if supported by strong governance and resilience standards.
Highlighting Nigeria’s efforts, Cardoso said the country has taken deliberate steps to modernise its payment ecosystem. These include tighter oversight of switching and payment infrastructure providers, enhanced agent banking regulations to address anti-money laundering and counter-terrorism financing risks, and improved interoperability across payment channels.
He disclosed that the apex bank is finalising a new Payment System Vision 2028, designed to promote innovation, strengthen system resilience and expand financial inclusion, with particular emphasis on improving cross-border payment efficiency.
Cardoso also revealed that Nigeria launched the National Payment Stack in June 2025—a next-generation, real-time payment system built on ISO 20022 messaging standards to support multi-currency and cross-border transactions.
In the remittance space, he said reforms such as the Non-Resident Nigerian Ordinary Account, the Non-Resident Nigerian Investment Account and the Non-Resident BVN platform have made it easier for Nigerians in the diaspora to send funds home and invest in the country. As a result, he said monthly remittance inflows now average about $600 million, with projections to reach $1 billion in the near term.
The CBN governor stressed that while central banks must modernise payment and settlement systems, safeguarding monetary and financial stability remains paramount. “The task before us is clear: to shape the future of global finance rather than be shaped by it,” he said.
He reaffirmed Nigeria’s commitment to collaborating with members of the G-24, the International Monetary Fund and the World Bank Group to promote a more inclusive, resilient and development-focused global financial system.
The warning aligns with earlier directives by President Bola Tinubu, who in September 2025 urged financial and capital market regulators to closely monitor the growing use of stablecoins and digital currencies in Nigeria, citing emerging risks to the traditional financial system.
