The Central Bank of Nigeria (CBN) has signed a Memorandum of Understanding (MoU) with a blockchain firm, Gluwa to drive the increased adoption of Nigeria’s digital currency, eNaira.
According to a statement from the blockchain firm, the partnership’s core objective is to harness the power of blockchain technology to enhance financial inclusion, improve eNaira functionality, and foster financial innovation.
By becoming the CBN’s official Partner Agent, Gluwa will integrate its Credal blockchain innovation directly with eNaira, as a first step towards deepened collaboration.
The company said it aims to onboard millions of Nigerians by implementing its Credal technology to build credit reputations for eNaira users as a valuable new way to drive the adoption of the Central Bank Digital Currency (CBDC).
The focus of the partnership
While noting that the integration of its Credal technology would enable easier loan origination, tracking, settlement, and credit scoring for local fintech, Gluwa said the partnership will focus on:
- “Enabling fintech lenders to expedite the loan origination process by facilitating direct eNaira transfers to customers, thereby enhancing the speed and efficiency of services provided.
- “Establishing the eNaira as the definitive record for all loan transactions conducted by fintech partners, ensuring accuracy and transparency in financial operations and credit scoring.
- “Implementing a robust authentication mechanism utilizing asymmetric encryption with private/public keys, to offer users a secure, private, and regulatory-compliant way of accessing financial services.”
The company added that becoming an official technology partner of the CBN marks a major leap forward in its continued mission to build a borderless financial ecosystem that focuses on emerging markets to foster greater financial inclusion.
What you should know
Nigeria launched the eNaira in October 2021, and it became the world’s second CBDC to be launched. However, the eNaira has struggled with adoption over the years.
The IMF, in a report reflecting on the first year of the eNaira’s launch, noted that the digital currency had 24/7 uptime but struggled with “disappointingly low” public adoption, with only 1.5% of wallets engaging in transactions weekly.
This is a welcome development from the federal government of Nigeria however, this would only be massively adopted if the currency could be paired with many currency across every trading platform including crypto currency.
I swear, Naira will fly and jump fence.