CBN: IMTOs’ naira settlement for diaspora remittances deepens FX transparency, security
The CBN mandates IMTOs to settle remittances in naira, aiming to boost FX transparency, security, and monitoring of inflows.Summary
The Central Bank of Nigeria (CBN) has directed all International Money Transfer Operators (IMTOs) to settle diaspora remittances in naira, effective May 1st, ending decades of dollar payments to recipients. This policy aims to deepen the FX market, improve transparency, traceability, and monitoring of foreign exchange flows, as remittances are a major source of FX for Nigeria. IMTOs must open naira settlement accounts and route all transactions through them, adhering to real-time market pricing on Bloomberg’s BMatch platform and AML/CFT regulations.
Alongside this, the CBN is pursuing broader reforms in digital cross-border payments to enhance economic inclusion and address limitations like high costs and settlement delays. Governor Cardoso emphasized the importance of efficient payment systems and highlighted Nigeria’s strengthened AML/CFT frameworks, leading to its recent removal from the FATF grey list. This removal is expected to boost investor confidence and reduce the cost of capital.
The CBN is also fostering fintech innovation through a Regulatory Sandbox, allowing secure testing of cross-border solutions. The bank recognizes the opportunities and risks associated with digital payments, including currency substitution and FX volatility, and is committed to creating a stable and inclusive financial ecosystem that benefits all stakeholders, including Micro, Small and Medium Enterprises (MSMEs).
(Source：Business News Nigeria)