CBN Pushes for Safer Digital Cross-Border Payments to Boost Financial Inclusion

The Central Bank of Nigeria (CBN) has emphasized the transformative potential of digital cross-border payments while cautioning that weak regulation could expose developing economies to financial instability and currency risks. CBN Governor Olayemi Cardoso made the remarks during a plenary address at the G-24 Technical Group Meetings in Abuja, highlighting that modern, efficient payment systems are key to creating a more inclusive economy. “An economy cannot be more inclusive than its payment system,” Mr. Cardoso said, stressing that millions are excluded from global commerce due to barriers in moving money across borders.

Cross-border payments remain costly and fragmented, especially for developing countries. Governor Cardoso pointed out that high remittance charges, foreign exchange costs, and delays in settlement continue to hamper economic growth. On average, global remittance corridors still carry fees above six percent, creating a significant barrier for households and small businesses that rely on these transfers.

Digital innovations, such as instant payment platforms, interoperable systems, and digital identity frameworks, offer opportunities to reduce costs and expand access to formal financial services. Nigeria has already made strides with initiatives like the National Payment Stack and simplified Know-Your-Customer rules for low-value cross-border transactions, enabling broader participation in systems such as the Pan-African Payment and Settlement System (PAPSS). These reforms have helped Nigeria record average remittance inflows of $600 million per month, with prospects of reaching $1 billion in the near future.

Despite these advancements, Mr. Cardoso warned of new risks posed by private digital platforms and stablecoins, which could lead to currency substitution, foreign exchange volatility, and fragmented regulations. He stressed that central banks must remain central to reforms, ensuring that the modernization of payment infrastructure does not compromise monetary stability. “Digital cross-border payments must become a public good,” he said, underscoring the need for coordinated global efforts to strengthen resilience and inclusion.

The discussions also touched on broader fiscal pressures in emerging markets. Minister of Finance Wale Edun highlighted that rising debt obligations are tightening fiscal space in low-income countries, with debt servicing exceeding official development assistance and foreign investment inflows. Iyabo Masha, Director of the G-24 Secretariat, added that member countries face heightened uncertainty, necessitating fiscal consolidation, social protection, and climate resilience investments. The meeting reinforced the urgency of aligning financial innovation with sustainable development goals.

source: premiumtime