Emerging economies may face heightened foreign exchange volatility and weakened monetary policy effectiveness if the rapid adoption of stablecoins and private digital payment platforms continues unchecked, the Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, has cautioned.
Speaking on Thursday at the opening ceremony of the G-24 Technical Group Meeting in Abuja, Cardoso delivered a plenary address titled “Digital Cross-Border Payments, Global Finance, and Economic Transformation – Opportunities and Risks.” He underscored that while digital innovation presents unprecedented opportunities to improve the efficiency of cross-border payments, its adoption must be carefully managed to preserve macroeconomic stability.
“The expansion of private digital payment platforms and stablecoins raises significant concerns about currency substitution, weakened monetary transmission, increased foreign exchange volatility, capital flow pressures, the systemic importance of non-bank payment providers, and risks associated with regulatory arbitrage and fragmentation,” Cardoso explained.
He warned that, without effective coordination across jurisdictions, the growth of digital cross-border payment systems risks fragmenting the global payments landscape. Dominant currencies and platforms could entrench themselves, interoperability across systems may decline, transaction costs could rise, and emerging markets could find their monetary sovereignty increasingly constrained.
Highlighting the persistent inefficiencies in international remittances, Cardoso noted, “Today, cross-border payments remain too slow, too costly, and too fragmented—particularly for developing economies. Global remittance corridors often charge fees exceeding six percent, settlements can take several days, and compliance requirements often exclude micro, small, and medium-sized enterprises (MSMEs). As a result, millions remain disconnected from global economic opportunity.”
According to Cardoso, these inefficiencies translate into higher remittance costs, expensive foreign exchange transactions, and systemic barriers for SMEs seeking to engage in global trade. However, he stressed that the adoption of advanced digital infrastructure—such as instant payment systems, interoperable platforms, distributed ledger technology, and digital identity frameworks—can significantly reduce transaction costs, shorten settlement times, and enhance monetary policy transmission if systems are designed with resilience and strong governance frameworks.
The CBN governor detailed several measures Nigeria has undertaken to modernize its payment ecosystem. These include strengthening oversight of switching and payment infrastructure providers, enhancing agent banking regulations to mitigate anti-money laundering and counter-terrorism financing risks, and improving interoperability across payment channels.
He also revealed that the CBN is concluding work on the Payment System Vision 2028, a comprehensive roadmap intended to spur innovation, reinforce resilience, and promote financial inclusion, with a particular focus on improving cross-border payments. The Vision 2028 initiative builds on the launch in June 2025 of Nigeria’s National Payment Stack, a next-generation real-time payment system developed using ISO 20022 messaging standards, designed to facilitate multi-currency and cross-border transactions efficiently.
Cardoso highlighted recent reforms targeting the remittance and diaspora investment sectors. Among these are:
- The Non-Resident Nigerian Ordinary Account, created to facilitate remittances and family support;
- The Non-Resident Nigerian Investment Account, enabling diaspora Nigerians to invest directly in the domestic economy;
- The Non-Resident BVN platform, which allows Nigerians abroad to open and manage bank accounts digitally.
“These reforms have yielded tangible results,” Cardoso noted. “Remittance inflows now average approximately $600 million per month, and we are confident of achieving a $1 billion monthly milestone in the near term.”
Despite the promise of digital innovations, Cardoso emphasized that central banks face the dual responsibility of modernizing payment and settlement systems while safeguarding monetary and financial stability. “The task before us is clear: To shape the future of global finance, rather than be shaped by it,” he stated, reinforcing Nigeria’s commitment to collaborate with G-24 members, the International Monetary Fund (IMF), and the World Bank Group in building a more inclusive, resilient, and development-oriented global financial system.
The governor also addressed the broader challenges facing developing economies in cross-border payments, pointing out that slow, costly, and fragmented payment corridors limit access for millions of individuals and SMEs. By leveraging digital technologies such as distributed ledger systems and real-time payment networks, he argued, emerging markets could lower transaction costs, reduce settlement delays, and enhance the effectiveness of monetary policy—provided that robust governance and regulatory oversight are applied.
Cardoso’s warnings echo broader concerns raised by national leadership. In September 2025, President Bola Tinubu directed financial and capital market authorities to monitor the growing use of stablecoins and digital currencies in Nigeria, cautioning that the shift away from traditional banking systems presents new challenges that must be proactively managed. Speaking at the 18th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria in Abuja, Tinubu—represented by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun—acknowledged the rapid transformation of the global financial system and stressed the importance of strategic oversight to safeguard national economic interests.
As Nigeria continues to modernize its payment infrastructure and expand financial inclusion, the CBN governor’s message highlights the delicate balance policymakers must strike between embracing digital innovation and preserving the stability of the financial system.