Central Bank of Nigeria Collaborates with Gluwa to Boost eNaira Digitization and Financial Inclusion
Summary:
The Central Bank of Nigeria (CBN) partners with blockchain-based platform Gluwa Nigeria to stimulate the use of the eNaira digital currency. Gluwa is set to integrate its Credal tech into the platform, which seeks to establish credit reputations for the unbanked population. This initiative is part of CBN's ongoing bid to expand eNaira usage. Gluwa previously collaborated with the Lagos regional government and proposed to consult on cryptocurrency regulation for the Nigerian government.
The Central Bank of Nigeria (CBN) and Gluwa Nigeria, an active blockchain-based financial platform in the region, have reached an agreement to encourage the use of eNaira, the central bank's digital currency. As a partner of the CBN, Gluwa aims to implement its Credal technology into the eNaira network, as per a report to Cointelegraph. The goal is to facilitate financial inclusion by creating "credit reputations" for those without banking facilities. These credit profiles, which will be globally accessible, are set to amplify the effectiveness of the digital currency.
Expectations are that Credal's integration will smoothen the processes of loan initiation, administration, resolution, and credit evaluation for indigenous fintech lenders. This initiative is one amongst many by the CBN to foster the use of eNaira, which, as the world's second-oldest digital currency, was introduced in October 2021. However, by mid-2023, less than 1% of Nigerians with bank accounts owned eNaira wallets, and a mere 1.5% of these wallet owners were weekly users.
Credit scores are a critical concern in Africa, with only 20-30% of Africans having one, making the rest "invisible" to financial lenders. Blockchain-based alternatives have been proposed to provide Africans with credit histories, using NFTs tethered to individual identities and data from small-scale peer-to-peer transactions. Numerous payment solutions in Africa rely on mobile phones as a substitute for conventional financial infrastructure, including Gluwa.
Gluwa has been present in Nigeria since at least 2022, when it partnered with the Lagos regional government to tokenize farm assets. It pitched publicly to the Nigerian government to consult on cryptocurrency regulation in April 2023. The Nigerian government has had frequent conflicts with cryptocurrency exchanges, leading to Binance discontinuing naira operations on March 8, following a government censure of crypto exchanges that singled out Binance in February.
Gluwa's founder and CEO, Tae Oh, is also the leader of the Creditcoin Network, a layer-1 blockchain similar to Gluwa. Creditcoin maintains a public record of credit histories and on-chain loan performances.
Published At
3/6/2024 11:51:52 PM
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