Olayemi Cardoso, Governor of the Central Bank of Nigeria, warned that digital payment systems posed risks to monetary sovereignty during a speech in Abuja. He delivered the address at the 2026 technical group meeting of the Intergovernmental Group of Twenty-Four on Wednesday.
Cardoso highlighted how rapid expansion of cross-border payments and stablecoins could expose emerging economies to vulnerabilities.
Risks of Currency Substitution and FX Volatility
Cardoso explained the potential dangers in detail. He stated: “The expansion of private digital payment platforms and stablecoins raises concerns about currency substitution, weakened monetary transmission, increased FX volatility, and capital flow pressures.”
Additionally, he noted systemic issues from non-bank providers and regulatory arbitrage.However Cardoso acknowledged opportunities for growth. He said digital tools could reduce transaction costs and expand access for households and small businesses.
Calls for Global Coordination
Cardoso urged stronger regulation and collaboration. He warned: “Without coordination, digital cross border payments risk becoming fragmented across jurisdictions, entrenching dominant currencies and platforms, increasing costs and undermining the ability of EMDEs to safeguard monetary sovereignty.”
This fragmentation could reduce interoperability and heighten financial instability. Meanwhile he emphasized reforms in instant payments and distributed ledger technology to foster inclusion.
Broader Economic Context
Wale Edun, Minister of Finance, attended the meeting and discussed geoeconomic fragmentation. Edun stated that debt pressures threatened emerging markets’ growth. He called for reforms in global financial architecture to expand concessional lending.
Furthermore, Cardoso linked inefficient payments to barriers in trade and remittances for developing economies. He advocated balanced approaches to harness digital innovation while mitigating risks.
