The Central Bank of Nigeria has partnered with Gluwa Nigeria, a blockchain-driven financial platform, to expedite the adoption of eNaira, the country’s central bank digital currency (CBDC). This collaboration, disclosed by Gluwa on March 7, underscores the continuous endeavors of Nigeria’s Central Bank to address hurdles in financial inclusion and the adoption of CBDCs.
Nigerian Central Bank Seeks eNaira Growth
Gluwa aims to extend credit profiles to unbanked individuals by integrating with eNaira. This integration will establish a digital system for assigning ratings and credit scores, facilitating more efficient access to credit for Nigerians in line with CBDC regulations. Gluwa’s solution will not only facilitate loan origination but also incorporate credit management, settlement, and assessment for local fintech lenders.
Since its inception in October 2021, the Central Bank of Nigeria has been actively seeking avenues to enhance eNaira adoption. According to IMF data, only approximately 1% of Nigerians with bank accounts possess eNaira wallets, with over 98.5% of them remaining dormant.
The lack of robust credit systems has long been a challenge in Africa, and blockchain-based solutions like Gluwa aim to address this issue. These solutions leverage tokenization to bridge the data gap inherent in traditional credit scoring, leveraging peer-to-peer transactions. Gluwa has been present in Nigeria since 2022, collaborating with Lagos State to tokenize agricultural assets through their real-world assets (RWAs) technology.
Cryptocurrency Regulations in Nigeria
Despite the introduction of eNaira in 2021, the Nigerian government’s stance on cryptocurrency remains complex. While initial bans on commercial banks collaborating with the crypto sector were lifted, inconsistent regulations still present challenges.
Recently, the Nigerian Communications Commission (NCC) restricted access to platforms of several cryptocurrency firms, including Binance, citing concerns about Naira market manipulations within its peer-to-peer (P2P) market framework. Despite this, Nigeria ranked first for P2P trades according to the Chainalysis 2023 Global Crypto Adoption Index.
Tensions escalated when reports surfaced of two senior Binance executives being detained by major government agencies and facing a hefty $10 billion fine. However, a senior government official later denied these allegations.
Tae Oh, founder and CEO of Gluwa, emphasized that his company’s solution aims to bolster eNaira adoption while spearheading blockchain-driven financial services innovation in Nigeria and beyond. Tae also leads the Creditcoin Network, a layer-1 blockchain akin to Gluwa, further demonstrating his dedication to advancing financial solutions.
