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The Central Bank of Nigeria (CBN) has formalized a partnership by signing a Memorandum of Understanding (MoU) with Gluwa, a blockchain firm. This collaboration aims to accelerate the widespread adoption of Nigeria’s digital currency, eNaira.
As outlined in a statement from Gluwa, the primary goal of this partnership is to leverage blockchain technology to amplify financial inclusion, enhance eNaira functionality, and stimulate financial innovation.
Gluwa, as the official Partner Agent of the CBN, will seamlessly integrate its Credal blockchain innovation with eNaira, marking the initial phase of an extensive collaboration.
The company envisions onboarding millions of Nigerians through the implementation of its Credal technology, which focuses on building credit reputations for eNaira users. This innovative approach aims to drive the adoption of the Central Bank Digital Currency (CBDC).
Key Focus Areas of the Partnership: Gluwa specified that the integration of Credal technology will facilitate easier loan origination, tracking, settlement, and credit scoring for local fintech. The partnership is set to:
- Enable fintech lenders to streamline the loan origination process by facilitating direct eNaira transfers to customers, thereby enhancing service speed and efficiency.
- Establish the eNaira as the definitive record for all loan transactions conducted by fintech partners, ensuring accuracy and transparency in financial operations and credit scoring.
- Implement a robust authentication mechanism using asymmetric encryption with private/public keys, providing users with a secure, private, and regulatory-compliant method of accessing financial services.
Gluwa emphasized that being recognized as the official technology partner of the CBN signifies a significant advancement in its mission to construct a borderless financial ecosystem. This ecosystem focuses on emerging markets to promote greater financial inclusion.
Background: Nigeria introduced the eNaira in October 2021, making it the world’s second Central Bank Digital Currency (CBDC) to be launched. However, despite its global recognition, the eNaira has faced challenges in garnering widespread adoption.
In a report reflecting on the first year of the eNaira’s launch, the International Monetary Fund (IMF) noted that the digital currency maintained 24/7 uptime but struggled with “disappointingly low” public adoption, with only 1.5% of wallets engaging in transactions on a weekly basis.
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