STABLECOINS COULD TRIGGER FX VOLATILITY, WEAKEN MONETARY POLICY – CBN GOV
Read Time:2 Minute, 37 Second
By Aishat Momoh. O.
The Governor of the Central Bank of Nigeria, Olayemi Cardoso, on Thursday warned that the growing adoption of stablecoins and private digital payment platforms could heighten foreign exchange volatility and weaken monetary policy transmission in emerging economies.
Cardoso spoke at the opening ceremony of the G-24 Technical Group Meeting in Abuja, where he delivered a plenary address titled “Digital Cross-Border Payments, Global Finance, and Economic Transformation – Opportunities and Risks.”
He cautioned that while digital innovation presents significant opportunities to address inefficiencies in cross-border payments, it also poses risks to macroeconomic stability if not properly coordinated.
“The expansion of private digital payment platforms and stablecoins raises concerns about currency substitution and weakened monetary transmission, increased FX volatility and capital flow pressures, systemic importance of non-bank payment providers, and regulatory arbitrage and fragmentation,” Cardoso said.
According to him, cross-border payments remain slow, costly and fragmented, particularly for developing economies. He noted that global remittance corridors cost over six per cent on average, with settlement delays of several days and compliance burdens that exclude micro, small and medium-sized enterprises.
He stressed that without international coordination, digital cross-border payments could become fragmented across jurisdictions, entrench dominant currencies and platforms, reduce interoperability, increase costs and undermine the ability of emerging markets to safeguard monetary sovereignty.
Cardoso disclosed that Nigeria has taken deliberate steps to modernise its payment ecosystem, including strengthening oversight of switching and payment infrastructure providers, tightening agent banking regulations to address anti-money laundering and counter-terrorism financing risks, and improving interoperability across payment channels.
He revealed that the apex bank is concluding work on a new Payment System Vision 2028 aimed at boosting innovation, strengthening resilience and advancing financial inclusion, with a focus on enhancing the cross-border payments environment.
In June 2025, Nigeria launched the National Payment Stack, a next-generation real-time payment system built on ISO 20022 messaging standards to support multi-currency and cross-border transactions.
The CBN governor also highlighted reforms in the remittance space, including the introduction of the Non-Resident Nigerian Ordinary Account for remittances and family support, the Non-Resident Nigerian Investment Account for diaspora investments, and the Non-Resident BVN platform to enable Nigerians abroad to open and operate accounts digitally.
“As a result of these reforms, remittance inflows now average about $600m per month, and we are confident of reaching a $1bn monthly milestone in the near term,” he said.
Cardoso emphasised that central banks must balance innovation with the responsibility of 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 added, reaffirming 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.
His remarks align with earlier concerns raised by Bola Tinubu, who in September 2025 directed financial and capital market authorities to closely monitor the increasing use of stablecoins and digital currencies in Nigeria, warning that the shift from traditional banking systems presents emerging challenges that must be proactively managed.
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