The Central Bank of Nigeria has partnered with Gluwa, a blockchain infrastructure firm, to drive the adoption of the country’s central bank digital currency, the e-Naira.
The collaboration aims to promote the use of e-Naira and enhance financial inclusion in Nigeria by leveraging blockchain technology to advance financial inclusion, enhance the functionality of e-Naira, and drive financial innovation.
The partnership will also focus on simplifying fintech lending by facilitating direct eNaira transfers to customers, streamlining the loan origination process, and enhancing service speed and efficiency. Additionally, it aims to authenticate transactions, ensuring the eNaira is the authoritative record for all loan transactions conducted by fintech partners and ensuring accuracy and transparency in financial operations and credit scoring.
Moreover, the collaboration will prioritize user authentication, implementing robust mechanisms such as asymmetric encryption with private and public keys to offer users secure, private, and regulatory-compliant access to financial services.
By streamlining remittance transfers, the eNaira can diminish costs, facilitating easier transactions for the Nigerian diaspora. Moreover, its account-based nature promises to inject transparency into informal payments, fortifying the tax base and formalizing economic transactions.
However, this transition to digital currency is not without its challenges. Monetary policy implementation and financial stability could face risks with the introduction of the eNaira. Measures such as daily transaction limits, identity verification protocols, and regular IT security assessments have been instituted to address cybersecurity concerns.
Nigeria regulates crypto
Nigeria’s Securities and Exchange Commission (SEC) has reportedly established new anti-money laundering guidelines for digital assets. The guidelines aim to enhance the licensing, registration, and screening processes for digital and virtual asset service providers (VASPs).
The Nigerian SEC’s initiative prevents individuals with criminal backgrounds from operating in the capital market, reinforcing market integrity and investor protection.
Furthermore, reports suggest that the SEC actively engages with the Central Bank of Nigeria (CBN) to incorporate additional feedback into the rules before final approval. This collaborative approach aims to strengthen regulations and ensure compliance within the digital asset space.
Nigerian regulatory authorities are seen as taking a proactive step to combat financial crimes in the digital asset sector by introducing these anti-money laundering guidelines. By setting clear rules and regulations, the SEC aims to create a compliant environment for legitimate VASPs while deterring illicit activities within the capital market.
The evolving regulatory landscape in Nigeria reflects a broader trend towards enhancing oversight and security in the digital asset ecosystem, aligning with global efforts to combat money laundering and terrorist financing activities.
