Nigeria has established a working group to explore the possible adoption of stablecoins as part of ongoing efforts to support innovation in the financial sector. According to Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), the development comes amidst plans to balance the risks of emerging technologies.
Speaking in a joint press briefing at the conclusion of the annual meetings of the World Bank and the International Monetary Fund (IMF) in Washington DC, Cardoso mentioned that the CBN, Ministry of Finance, and other relevant financial bodies have set up a working committee to take a deep dive into understanding the broader ramification and implications of adopting a viable framework for stablecoins in Nigeria.
Nigeria plans to set up working groups on stablecoin adoption
During the press briefing, Cardoso explained that discussions surrounding stablecoins were one of the key themes of the meeting. “The message from there is that the Central Bank Governor, the Ministry of Finance, and others reached a general consensus on the need to support innovation and ensure it continues. By no means does anybody want to stifle innovation. However, there is also a need to balance this with the risks involved in these new technologies and digital currencies,” Cardoso said.
Cardoso also mentioned that beyond policy engagement, the premier bank is looking to establish deep partnerships with key stakeholders to drive innovation and investment in the sector.Â
The CBN governor reflected on the impact of disciplined monetary tightening, exchange rate unification, and improved market transparency being practiced in the country. He claimed that the naira has continued to gain strength, noting that the spread between the official and bureau de change rates is now below 2%.
In terms of foreign reserves, Cardoso claimed that Nigeria’s foreign reserves stand above $43 billion, providing more than eleven months of forward import cover, supported by sustained inflows and investor participation.
CBN governor hails bold reforms
The CBN governor also claimed that the ongoing reforms in Nigeria have enhanced transparency and efficiency in the foreign exchange market. He spoke about the increased role of non-bank financial institutions. Cardoso claimed that the ratio of financial dependence on banks versus non-banks has continued to shrink. “Therefore, there is a need to closely monitor how that sector develops and to strengthen regulations accordingly,” he stated.
Cardoso pointed out that the removal of fuel subsidies and expenditure rationalization has helped rebalance public finances and create space for productive investment.Â
Speaking at the press briefing on the creation of jobs by the federal government of Nigeria, Doris Nkiruka Uzoka-Anite, Nigeria’s Minister of State for Finance, mentioned that the government has been prioritizing investment in infrastructure, the digital economy, and agriculture.
“These initiatives, in collaboration with the World Bank, will catalyze job creation and business growth,” she said. “With the increase in government revenue, which we expect to rise further next year through new tax reforms and the digitization and automation of revenue collection, the government will have more funds to invest in these priority sectors.”
