The Central Bank of Nigeria (CBN) has issued a firm warning that the rapid rise of digital payment platforms and privately issued stablecoins could challenge foreign exchange stability in developing economies. The caution came from the CBN Governor, Olayemi Cardoso, during a plenary address at the Group of Twenty-Four (G-24) Technical Group Meetings in Abuja on February 19, 2026.
Governor Cardoso acknowledged that digital payment technologies present real advantages for financial inclusion and operational efficiency. He noted that mobile and online payment systems have helped expand financial access, reduce transaction costs, and modernise payment infrastructure. These innovations have underpinned growth in electronic transactions, with Nigeria recording significant increases in digital payment volumes in recent years.
However, beyond the benefits, Cardoso was clear that uncoordinated growth in digital payments can introduce vulnerabilities if left unchecked. He highlighted that private digital payment platforms and stablecoins, digital assets pegged to traditional currencies but issued outside central bank frameworks, pose risks to monetary policy and exchange rate management. Without robust oversight, these systems could weaken traditional monetary control mechanisms.
The governor’s analysis focused on core systemic risks. First, he pointed to the potential for currency substitution, where private digital instruments gain popularity at the expense of local currencies. This could weaken the effectiveness of monetary transmission, making it harder for central banks to control inflation and liquidity. Second, he flagged the risk of increased foreign exchange volatility. Unregulated digital flows could trigger capital flight or abrupt shifts in demand for foreign currency, unsettling exchange rates. Third, he stressed that non-bank payment providers could become systemically important without commensurate regulatory supervision.
Cardoso also emphasised that fragmented regulatory approaches across countries could compound these risks. If cross-border digital payment systems evolve without coordination, they could entrench dominant currencies and platforms. Such fragmentation might reduce interoperability, raise transaction costs, and limit the ability of emerging market and developing economies to safeguard monetary sovereignty. In his view, global regulatory alignment is critical to prevent these outcomes.
The CBN governor’s remarks were grounded in broader concerns shared within the G-24, an intergovernmental grouping that represents developing economies in discussions on global monetary, financial and development issues. The G-24 platform focuses on harmonising member positions on international economic governance and ensuring that the interests of emerging markets are considered in global standard setting.
Dr. Iyabo Masha, Director of the G-24 Secretariat, added context to the gathering by noting uneven global growth trends. While some regions show resilience, overall expansion lacks the depth needed for inclusive economic transformation. This backdrop underscored why digital systems and financial stability are priorities for the assembly.
Nigeria’s experience illustrates both the promise and the challenge of digital finance. The country’s payment system has evolved rapidly, extending access to formal financial services for millions. Yet the CBN’s warning underscores a broader lesson: innovation must be matched with strong governance if it is to strengthen, rather than destabilise, macroeconomic frameworks.
