Nigeria’s Central Bank Collaborates with Gluwa Nigeria to Boost eNaira Adoption
Nigeria’s Central Bank has joined forces with Gluwa Nigeria, a blockchain-powered financial platform, to accelerate the utilization of eNaira, the country’s central bank digital currency (CBDC). This partnership, announced by Gluwa on March 7, underscores the ongoing initiatives by Nigeria’s Central Bank to address challenges related to financial inclusion and CBDC uptake.
Enhancing Financial Inclusion Through eNaira
Gluwa aims to enhance financial inclusion by offering credit profiles for unbanked individuals through seamless integration with the eNaira. This innovative approach enables the digital assignment of ratings and credit scores, facilitating increased access to credit for a broader segment of the Nigerian population in a streamlined, CBDC-compliant manner. Furthermore, Gluwa’s solution will provide comprehensive support for credit management, settlement, and evaluation processes for local fintech lenders.
Expanding eNaira Adoption Efforts
Since its introduction in October 2021, the Central Bank of Nigeria has been exploring strategies to drive the adoption of the eNaira. Data from the International Monetary Fund (IMF) indicates that only approximately 1% of Nigerians holding bank accounts currently possess eNaira wallets, with a significant portion of these wallets remaining inactive. Addressing the issue of credit systems has long been a challenge in Africa, and blockchain-based solutions like Gluwa are poised to revolutionize the landscape.
Utilizing Tokenization for Enhanced Credit Scoring
Blockchain-based solutions leverage tokenization to bridge the existing data gap in traditional credit scoring methodologies, leveraging insights from peer-to-peer transactions. Gluwa’s involvement in Nigeria dates back to 2022 when the company collaborated with Lagos State to tokenize agricultural assets using their real-world assets (RWAs) technology.
Regulatory Landscape and Cryptocurrency in Nigeria
The regulatory environment surrounding cryptocurrency in Nigeria remains complex, despite the introduction of the eNaira in 2021. While initial restrictions on commercial banks engaging with the crypto sector have been lifted, inconsistent regulations continue to present challenges. Recently, the Nigerian Communications Commission (NCC) restricted access to platforms of several cryptocurrency firms, including Binance, citing concerns about market manipulations within the Naira peer-to-peer (P2P) market framework. Nigeria notably ranked first for P2P trades in the Chainalysis 2023 Global Crypto Adoption Index.
Challenges and Opportunities in the Cryptocurrency Sector
The situation escalated when reports emerged of two senior Binance executives being detained by major government agencies and facing a substantial fine of $10 billion. However, a senior government official later denied these allegations. Tae Oh, the founder and CEO of Gluwa, emphasized the company’s commitment to driving eNaira adoption and spearheading blockchain-driven financial services innovation in Nigeria and beyond. Tae also leads the Creditcoin Network, a layer-1 blockchain platform akin to Gluwa, further underscoring his dedication to advancing financial solutions in the region.
By collaborating with Gluwa Nigeria, Nigeria’s Central Bank is taking significant strides towards promoting financial inclusion, enhancing eNaira adoption, and fostering innovation in the country’s financial landscape. This partnership signifies a crucial step in leveraging blockchain technology to address longstanding challenges and drive economic empowerment across Nigeria and the broader African continent.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
