The Central Bank of Nigeria (CBN) has concluded a memorandum of understanding with Gluwa Nigeria to promote the usage of the eNaira central bank digital currency (CBDC). Gluwa is a blockchain-based financial platform that has been active in Nigeria for several years.
As an agent partner of the CBN, Gluwa will integrate its Credal technology into the eNaira platform, according to a statement sent to Cointelegraph. It plans to enable the creation of “credit reputations” for unbanked users, thus furthering financial inclusion. The credit profiles it will create will be “accessible across borders” and increase the CBDC’s effectiveness:
“The integration of Credal is anticipated to streamline loan origination, management, settlement, and credit assessment processes for local fintech lenders.”
This is the latest of many attempts by the CBN to boost eNaira usage. The eNaira is the world’s second-oldest CBDC, launched in October 2021. Less than 1% of Nigerians with bank accounts had eNaira wallets, and less than 1.5% of wallet holders were active in a week, as of mid-2023.
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Credit ratings are a sore point in Africa. Only 20-30% of Africans have a credit score, leaving the remainder of its people “invisible” to lenders. Other blockchain-based solutions offered to provide Africans with credit histories use soul-bound NFTs and capture information from low-value peer-to-peer transactions.
Many of the payment solutions available in Africa, including Gluwa, depend on the use of mobile phones in place of traditional financial infrastructure.
Gluwa has been active in Nigeria since at least 2022 when it cooperated with the Lagos regional government to tokenize agricultural assets. It made a well-publicized pitch to the Nigerian government to advise it on cryptocurrency policy in April 2023. The Nigerian government has often been at odds with cryptocurrency exchanges.
Binance will cease operations with the naira on March 8 after Nigerian government criticism of crypto exchanges singled it out in February.
Gluwa founder and CEO Tae Oh is also the head of the Creditcoin Network, which, like Gluwa, is a layer-1 blockchain. Creditcoin creates a public ledger of credit history and on-chain loan performance.
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