Nigeria's Central Bank Enlists Gluwa Nigeria to Boost eNaira Systems, Adoption

BY Coindesk | ECONOMIC | 03/07/24 08:19 AM EST By Camomile Shumba
  • The Central Bank of Nigeria and Gluwa plan to link the eNaira and Credal blockchain API technology.
  • The arrangement will ensure easier loan origination, tracking, settlement and scoring for local fintech lenders.

The Central Bank of Nigeria is working with blockchain technology firm Gluwa Nigeria to make the eNaira digital currency's systems more efficient and boost adoption in the country of more than 226 million people.

The central bank plans to issue application programming interfaces (APIs) to Gluwa for integration with the company's Credal blockchain technology. APIs are software intermediaries that allow applications to talk to each other.

The "core objective is to harness the power of blockchain technology to enhance financial inclusion, improve eNaira functionality, and foster financial innovation," Gluwa said in a release shared with CoinDesk.

Connecting through Credal is intended to ensure easier loan origination, tracking, settlement, and credit scoring for local fintech lenders.

Nigeria has been trying to broaden acceptance of the central bank digital currency (CBDC) since its launch in 2021. The number of eNaira wallets increased more than 12-fold between October 2022 and March 2023 to 13 million and the value of transactions climbed 63% to 22 billion naira ($14 million) in the first four months of last year.

The country has a $220 billion informal economy that thrives on cash, and eNaira adoption has not caught up with cash use in Africa's most populous country in part owing to a lack of merchants that accept it.

Read more: Why Nigerians Aren't Turning to the eNaira Despite Crippling Cash Shortages

UPDATE (March 8, 15:55 UTC): Rewrites first bullet point. An earlier version of the story said the central bank wanted the link.

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

fir_news_article