CBN Pursues Enhanced Security for Digital Cross-Border Payment Systems

Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), stated that digital cross-border payment systems could significantly benefit developing economies. However, he cautioned that inadequate regulation might lead to financial instability.

The CBN Governor made these remarks during a plenary speech at the G-24 Technical Group Meetings held on Thursday in Abuja.

Cardoso underscored the need for sound financing strategies to ensure sustainable and inclusive growth. He articulated the fundamental truth that an economy's inclusiveness is directly tied to the efficiency of its payment systems, pointing out that substantial barriers to cross-border monetary transfers continue to exclude vast populations from participating in global trade.

He identified inefficiencies in cross-border payments as a macroeconomic issue for developing nations, highlighting the issues of high remittance costs, foreign exchange fees, and delayed settlements. Cardoso remarked, "Cross- border payments still face challenges of being too slow, bulky, and costly, especially for less developed countries," noting that remittance corridors generally incur average costs exceeding six percent.

In terms of digital prospects, he expressed confidence that evolving technologies, including instant payment mechanisms, interoperable systems, and digital identity frameworks could drastically lower costs while enhancing transparency and accessibility to formal financial services for households and small enterprises.

As examples, he referenced India's Unified Payments Interface and Brazil's PIX, which have both facilitated real-time settlements and lowered transaction costs in their respective economies. Cardoso further acknowledged that Nigeria has made strategic efforts to upgrade its payment systems.

He revealed that the CBN is finalizing its Payment System Vision 2028, intended to reinforce resilience, spur innovation, and promote financial inclusion.

In June 2025, Nigeria introduced the National Payment Stack, a real-time payment solution based on ISO 20022 messaging standards aimed at supporting multi-currency and cross-border transactions. To facilitate small-scale trade, the apex bank has also simplified the Know-Your-Customer requirements for low- value cross-border transactions.

Additionally, regarding the diaspora remittance sector, Cardoso mentioned new initiatives such as the Non-Resident Nigerian Ordinary Account and the Non- Resident Nigerian Investment Account. He stated that these initiatives are projected to increase remittance inflows, currently averaging about $600 million monthly, with hopes of reaching a $1 billion monthly threshold soon.

In his proceedings, he acknowledged the contributions of the Finance Minister and Chair of the G-24, Wale Edun, for outlining a reform agenda focused on enhancing global finance and building the capabilities of domestic institutions in developing nations. Despite expressing optimism, Cardoso highlighted the potential new risks posed by rapidly expanding digital payment systems if not well-regulated.

He raised concerns regarding private digital payment services and stablecoins, which could lead to currency replacement, foreign exchange fluctuations, and fragmented regulations affecting monetary policy. Emphasizing the need for coordinated efforts, he cautioned that unless managed correctly, fragmented digital cross-border payments might threaten the monetary sovereignty of emerging economies.

Cardoso emphasized that central banks must take a central role in reforming payment systems to maintain stability and trust within financial frameworks. He insisted that the effectiveness of reforms shouldn't solely rely on speed and cost reduction but should also ensure continued stability and resilience while integrating developing economies into global financial practices.

He concluded by reiterating Nigeria's commitment to collaborating with G-24 members as well as the IMF and World Bank to create a more inclusive and development-focused international financial system. He also noted rising public debt burdens as a critical challenge for many global south nations, with several low-income countries approaching crippling debt levels.

The G-24 meeting highlighted the urgency of reforming international financial institutions and developing a financial architecture that is more inclusive and responsive to current global economic realities.