Stablecoins and Private Digital Payments Could Fuel FX Volatility, CBN Warns
Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), has issued a strong warning that the rapid adoption of stablecoins and private digital payment platforms could exacerbate foreign exchange volatility and undermine monetary policy transmission in emerging economies.
Cardoso delivered these remarks on Thursday during a plenary address titled “Digital Cross-Border Payments, Global Finance, and Economic Transformation – Opportunities and Risks” at the G-24 Technical Group Meeting held in Abuja.
While acknowledging that digital innovations offer a historic chance to fix inefficiencies in the global financial system, he cautioned that they must be approached with strict regulatory oversight to preserve macroeconomic stability.
“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,” the CBN governor stated.
He stressed that without proper global coordination, these new financial technologies pose a significant threat to the economic independence of developing nations.
“Without coordination, digital cross-border payments risk becoming fragmented across jurisdictions, entrenching dominant currencies and platforms, reducing interoperability, increasing costs and undermining the ability of Emerging Market and Developing Economies to safeguard monetary sovereignty,” Cardoso warned.
Addressing the current state of global finance, Cardoso lamented that traditional systems are failing those who need them most.
“Today, cross-border payments remain too slow, too costly, and too fragmented, especially for developing economies. With global remittance corridors costing over 6.0 per cent, settlement lags of several days, and compliance burdens that exclude MSMEs, millions remain disconnected from global opportunity,” he explained.
To combat these challenges, Cardoso noted that Nigeria has taken deliberate steps to modernize its payment ecosystem and strengthen its regulatory framework.
He highlighted the recent launch of the National Payment Stack in June 2025; a next-generation real-time system designed to seamlessly support multi-currency and cross-border transactions, as well as the introduction of new Non-Resident Nigerian accounts for diaspora investments and family support.
These strategic reforms in the remittance space are already yielding tangible results. “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,” the governor announced.
Concluding his address, Cardoso reaffirmed Nigeria’s commitment to collaborating with global financial institutions such as the IMF and the World Bank.
He emphasized that central banks must proactively safeguard financial stability while adapting to new technologies, declaring, “The task before us is clear: To shape the future of global finance, rather than be shaped by it.”
