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A financial analyst, speaking on the development, noted that “routing remittances through naira settlement accounts will improve traceability and reduce the arbitrage opportunities that previously encouraged speculative demand for foreign currency.”

The CBN has explained that the policy is designed to deepen diaspora remittances while enhancing transparency, monitoring, and overall efficiency in FX management. By ensuring that inflows are converted within the formal banking system, the apex bank aims to boost liquidity in the official market and discourage parallel market activities.

What does the new circular say?

Director of the Trade and Exchange Department at the CBN, Musa Nakorji, said all IMTOs must strictly comply with the new framework.

“All IMTOs are hereby directed to open naira settlement accounts and ensure that all transactions are routed strictly through their designated settlement accounts maintained with authorised dealer banks in Nigeria,” he said.

According to the guidelines, all transactions related to international money transfers, including disbursements to beneficiaries, must be processed exclusively through these accounts. IMTOs are also required to notify the CBN of their designated settlement accounts and provide updates as necessary.

The apex bank clarified that such accounts would only be credited with remittance inflows and proceeds of FX conversions carried out with authorised participants in the Nigerian Foreign Exchange Market (NFEM).

On pricing, the apex bank instructed IMTOs to benchmark their rates against real-time market prices on Bloomberg’s BMatch platform.

“IMTOs shall observe real-time market prices from the Bloomberg BMatch and utilise this as guidance for pricing transactions with their customers and authorised dealers,” the CBN said.

The bank said the move would improve price discovery, reduce information asymmetry, and encourage participation in the official FX market.

The regulator also reminded the IMTOs to comply with anti-money laundering, combating the financing of terrorism, and counter-proliferation financing (AML/CFT/CPF) requirements, while maintaining proper records for audit and regulatory review.

Experts believe this centralisation will significantly improve oversight and reduce the risk of illicit financial flows. By consolidating remittance processing within regulated channels, authorities can better monitor transactions and enforce compliance with existing regulations.

In addition, the CBN has directed IMTOs to align their exchange rates with real-time market data from Bloomberg’s BMatch platform. Analysts say this will improve price discovery and reduce information asymmetry in the FX market.

“Benchmarking rates against a transparent platform like BMatch will help standardise pricing and discourage wide discrepancies that often fuel speculation,” another market operator said.

Beyond transparency, stakeholders argue that the policy will strengthen Nigeria’s FX reserves by ensuring that remittance inflows are properly captured within the banking system. Diaspora remittances remain one of the country’s most stable sources of foreign exchange, often surpassing foreign direct investment and official development assistance.

By eliminating cash-based dollar payouts, the policy is also expected to reduce the pressure on physical foreign currency demand and enhance the stability of the naira over time.

The directive came amid broader efforts by the CBN under its Governor, Olayemi Cardoso, to reform Nigeria’s FX framework and modernise cross-border payment systems.

Speaking at the G-24 Technical Group Meetings in Abuja, Cardoso emphasised the importance of efficient payment systems in driving financial inclusion and economic growth. He noted that high remittance costs, settlement delays, and fragmented payment systems continue to limit participation in global trade, particularly for households and small businesses.

According to him, reforms in digital cross-border payments are essential to achieving a more inclusive and resilient financial system.

“We have strengthened our Anti-Money Laundering and Countering the Financing of Terrorism frameworks in line with global standards, requiring strict dual-screening of cross-border transactions to mitigate risks,” Cardoso said.

He added that Nigeria has also introduced simplified Know Your Customer requirements for low-value cross-border transactions to encourage broader participation in regional payment systems and facilitate intra-African trade.

Experts say these reforms, combined with the naira settlement directive, will position Nigeria for more efficient and secure cross-border financial flows.

“IMTOs must set their remittance rates to reflect current market prices from Bloomberg’s BMatch platform rather than being set independently.

“By doing this, the CBN aims to ensure more accurate pricing, reduce information gaps between banks and IMTOs, and encourage greater use of the official FX market,” wrote Aderonke Alex-Adedipe and Promise Itah in an article, “New CBN Measures On Diaspora Remittances: What They Mean For Market Participants.”

They argued that in addition to complying with the above measures, all IMTOs (and ADBs) must strictly comply with anti‐money laundering and counter-terrorism financing rules.

“Detailed records of all remittance transactions (origins, amounts, beneficiaries, conversions, etc.) must also be kept for regulatory review and audit purposes,” they added.

The policy is also expected to complement Nigeria’s recent progress in strengthening its anti-money laundering framework. The Financial Action Task Force (FATF) recently removed Nigeria from its grey list, citing significant improvements in addressing deficiencies related to money laundering and terrorist financing.

Commenting on the announcement, Cardoso, said: “The FATF’s decision to remove Nigeria from the grey list is a strong affirmation of our reform trajectory and the growing integrity of our financial system it reflects a clear policy direction and the coordinated efforts of key national institutions working together to deliver sustainable, standards-based reforms.

“Our priority now is to consolidate these gains, ensuring that compliance, innovation, and trust continue to advance hand in hand to reinforce financial stability and strengthen Nigeria’s global credibility.”

Analysts say the naira settlement initiative aligns with global best practices and reinforces Nigeria’s commitment to maintaining a credible and secure financial system.

President of the Association of Bureaux De Change Operators of Nigeria, Aminu Gwadabe, said the country’s removal from the FATF grey list has already boosted investor confidence and reduced tensions in the financial market.

“The development shows Nigeria’s commitment to achieving international standards and has strengthened confidence in the system,” he said.

Industry watchers also point out that the move could encourage greater use of digital financial services, as remittance recipients increasingly rely on bank accounts and fintech platforms to access funds.

Nigeria’s fintech ecosystem, one of the most dynamic in Africa, is expected to play a key role in supporting the transition. With continued investment and innovation, digital platforms are likely to enhance the speed, convenience, and accessibility of remittance services.

Ultimately, experts agree that the success of the policy will depend on effective implementation, stakeholder collaboration, and sustained public awareness.

“The CBN’s new measures on diaspora remittances are part of a series of significant steps toward formalising diaspora remittance flows and improving transparency in Nigeria’s foreign exchange market. By mandating designated settlement accounts, real-time pricing, and stricter compliance standards, the framework is expected to enhance liquidity, strengthen regulatory oversight, and reduce reliance on informal channels.

“While stakeholders will need to adjust their operations to meet the new requirements, the CBN expects that the reforms should, over time, support better price discovery and contribute to greater stability of the naira,” the analysts added in the article.