Market News

By : Collins Olayinka

RAPID expansion of private digital payment platforms could increase foreign exchange volatility and weaken monetary policy transmission across emerging markets, the Governor of the Central Bank of Nigeria, Olayemi Cardoso, has warned.

According to him, the introduction of diaspora-focused instruments, including non-resident Nigerian ordinary and investment accounts, alongside a digital platform, has enabled Nigerians abroad to open and manage accounts remotely.

Cardoso disclosed that remittance inflows now average approximately $600 million monthly, with projections to reach $1 billion per month soon.

The CBN chief, who stated this at the 2026 Technical Group Meeting (TGM) of the Intergovernmental Group of 24 on International Monetary Affairs and Development in Abuja yesterday, Cardoso cautioned that while digital cross-border payments provide transformative opportunities, they could also pose systemic risks if not effectively regulated.

Specifically, Cardoso explained that the proliferation of private digital payment systems raises concerns about currency substitution, capital flow pressures, regulatory arbitrage, and the growing importance of non-bank payment providers.

He declared that without coordination, digital cross-border payments could fragment across jurisdictions, solidify dominant currencies and platforms, reduce interoperability, and undermine the monetary sovereignty of developing economies.

He added: “Many G-24 countries, especially those with limited financial markets and capacity constraints, face heightened vulnerabilities. Therefore, the digital transition must be carefully planned and well-regulated.”

However, the CBN helmsman admitted that cross-border payments must be treated as a macroeconomic and developmental priority rather than a purely technical reform.

He lamented that the high remittance costs, which average over six per cent globally, multi-day settlement cycles, and heavy compliance burdens have continued to exclude millions of households and Micro, Small, and Medium Enterprises (MSMEs) from global economic participation In an address to the delegates, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, called for a unified Global South stance on reforming the international financial architecture.

He insisted that the G-24 members should prioritise local currency financing, digital payment integration, concessional multilateral funding, and regional development banks, while accelerating digital cooperation and innovative financing mechanisms such as blended finance and green bonds.

The minister observed that fragmentation in the global economy is not an unavoidable outcome but necessitates strategic integration and renewed multilateralism to prevent it.

Meanwhile, the Director and Head of Secretariat of the group, Dr Iyabo Masha, warned that Emerging Market and Developing Economies (EMDEs) were going through ‘stability without dynamism’, saying the global resilience seems to be masking tightening policy space and rising structural risks.

Masha paid glowing tributes to the global economy, which has demonstrated adaptability in the face of recent shocks, with moderating inflation and easing supply disruptions.

However, she warned that perceived resilience must not be mistaken for robustness.