Embracing Crypto: Gluwa and Nigeria Join Forces to Create Regulatory Framework

Cryptocurrencies have evolved from a side industry to a mainstream financial phenomenon in recent years. Cryptocurrencies are novel digital currencies that eliminate the need for a centralized authority such as a bank by relying on blockchain technology to allow safe, decentralized transactions. Nigeria isn't the only country struggling to figure out how to regulate and embrace these alternative currencies. Nigeria, the continent's biggest economy, has much to gain by joining the financial future by adopting cryptocurrencies and making their use legal.

History of Cryptocurrency in Nigeria

The early days of cryptocurrency trading in Nigeria can be traced back to around 2013, when Bitcoin, the first and most well-known cryptocurrency, started gaining global attention. A small community of tech enthusiasts and entrepreneurs in Nigeria recognized the potential benefits of digital currencies and began trading on international platforms.

The Central Bank of Nigeria (CBN) took a hands-off attitude at first, choosing neither to endorse nor to restrict cryptocurrency usage. However, as cryptocurrency use increased, the CBN became worried about issues including money laundering, terrorist funding, and consumer protection that may arise as a result. In 2017, the CBN published a circular in response to these worries, advising financial institutions to avoid any involvement with virtual currencies.

This stance became even more stringent in 2021, when the CBN banned all regulated financial institutions from providing services to cryptocurrency exchanges and other entities dealing in digital currencies. The move was widely criticized by the public, tech community, and businesses who saw cryptocurrencies as an avenue for financial inclusion and economic growth. The ban severely restricted the growth of the cryptocurrency market in Nigeria, leading to a burgeoning underground market and the use of peer-to-peer trading platforms.

Gluwa Proposes Collaboration with Nigerian Federal Government on Cryptocurrency Legalization

Leading global blockchain company Gluwa has proposed a collaboration with the Federal Government of Nigeria to support the development of a cryptocurrency policy framework. This framework aims to unlock the potential of blockchain technology in Africa's largest economy, paving the way for economic growth and innovation.

Gluwa's Blockchain-based Solutions

Gluwa has already made significant strides in the world of blockchain technology, having built the world's first blockchain-based credit repository. The Creditcoin network enables financial institutions to tackle fraud and credit scoring through trustless, on-chain credit history verification. Additionally, the Gluwa Wallet is a multi-purpose, non-custodial wallet that allows users to invest their USDC in various global fintech lending partners via blockchain technology. Furthermore, the company's venture arm, Gluwa Capital, invests in startups and has committed $35 million to the growth of locally-owned financial service providers and crypto exchanges in Africa.

Gluwa's Vision for Cryptocurrency in Nigeria

Gluwa CEO Tae Oh expressed the company's belief in the transformative potential of cryptocurrencies in Nigeria and across the African continent. By working closely with the Nigerian government, Gluwa aims to create a policy framework that encourages responsible cryptocurrency use while also protecting consumers and preventing criminal activities.

Nigeria's Current Stance on Cryptocurrency

Despite a surge in cryptocurrency adoption and usage, particularly among its younger population, the Nigerian government has yet to fully embrace digital assets due to concerns about fraud, money laundering, and other criminal activities. Gluwa believes that a well-crafted policy framework can help digital assets play a crucial role in driving economic growth and financial inclusion in Nigeria.

Gluwa's Proposal for a Policy Framework

Gluwa has submitted its proposals to the Nigerian Ministry of Finance, emphasizing the importance of fostering innovation, encouraging investment, and supporting the growth of the blockchain industry. The company eagerly anticipates collaborating with the Ministry to create an environment that benefits both the government and the burgeoning blockchain industry.

Addressing Longstanding Financial Challenges

Blockchain technology has the potential to address numerous longstanding challenges in Nigeria's financial system, such as high transaction costs, limited access to credit, and a lack of financial inclusion. Ahmed Gloria Kufeji, a Director at the Nigerian Ministry of Finance, has expressed the Ministry's commitment to creating a policy framework that encourages innovation and investment while also protecting consumers and preventing criminal activities.

Support from Blockchain Industry Stakeholders

Tebogo Thobeje, founder of the Blockchain Africa Society, has praised Gluwa's proposal, stating that it is a positive development for the African blockchain industry with Nigeria at the forefront. Thobeje encourages the Nigerian government to take a proactive approach to support the growth of the blockchain industry and looks forward to working with Gluwa and other important stakeholders to achieve this goal.

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Image credits: AI.