CBN governor warns stablecoins may increase FX risks
Olayemi Cardoso, Governor of the Central Bank of Nigeria, has raised concerns about the impact of stablecoins and private digital payment platforms on Nigeria’s foreign exchange stability. Speaking at the G-24 Technical Group Meeting in Abuja, Cardoso warned that these innovations could weaken monetary policy and increase FX volatility in emerging economies. He highlighted both the opportunities and risks of digital cross-border payments, urging caution to preserve macroeconomic stability. Bola Tinubu has also called for close monitoring of digital currencies in Nigeria.
TLDR
- Olayemi Cardoso cautioned that stablecoins and digital payment platforms could heighten FX volatility and weaken monetary policy in emerging economies.
- He said digital innovation can improve cross-border payments but must be managed carefully to avoid fragmentation and loss of monetary sovereignty.
- Cardoso noted that cross-border payments remain slow and costly, with inefficiencies raising remittance costs and creating barriers for SMEs.
- Nigeria is working on modernising its payment ecosystem, including a new Payment System Vision 2028 and reforms in the remittance space.
- Bola Tinubu instructed authorities to monitor stablecoins and digital currencies, citing challenges from the shift away from traditional banking systems.
