Imagine not being able to prove you are trustworthy because no one has kept a record of your financial behaviour. That is the reality for more than a billion people. The World Economic Forum estimates that around 1.4 billion adults remain unbanked, with women representing 56 % of that population. In Nigeria, roughly 36 % of adults do not have a bank account, and tens of millions more are “credit‑invisible” because traditional bureaus have no data on them. The consequences are stark: working families pay average remittance fees of 6.62 % (some corridors exceed 10 %) when sending money home, they lack basic credit scores and they remain trapped in a cash economy. In the United States alone, 45 million people lack credit histories and roughly 20 % of consumer credit reports contain errors.
Traditional credit bureaus rely on bank relationships, income documentation and a handful of data points. If you are unbanked, live on daily wages, or operate in informal markets, you effectively don’t exist in their world. Meanwhile, central banks are experimenting with central bank digital currencies (CBDCs), but adoption has been disappointing. Nigeria’s eNaira, Africa’s first CBDC accounts for just 0.36 % of currency in circulation, and though 13 million wallets have been created, 98.5 % remain inactive. The IMF found that only about 14,000 eNaira transactions occur each week, representing 1.5 % of wallets, suggesting that digital fiat alone does not solve the inclusion problem.
The current system is both exclusionary and inefficient. Remittances and micro‑loans still rely on middlemen, fees remain high and credit data resides in proprietary silos. Decentralized finance (DeFi) offers an alternative, one where transactions are recorded on public blockchains, smart contracts replace trusted intermediaries and anyone with an internet connection can participate. Yet DeFi is still largely focused on speculative trading. Could decentralized credit recording of loan histories on public ledgers be the missing link? This article argues yes, and that Gluwa’s Creditcoin network and its Credal API are quietly building that future.
The Problem With Traditional Credit & Financial Systems
The old credit system was designed in an era of paper records and brick-and-mortar banks. As a result, it’s not suited for the informal and mobile-first economies that dominate emerging markets. Here are some stats:
- Credit invisibility: 45 million Americans have no credit history. 1.7 billion adults worldwide are unbanked, 300 million of whom can’t open an account because they don’t have acceptable ID.
- Gender gap: In 2017 the World Bank estimated 980 million women were unbanked, 56% of all unbanked adults. Women face higher legal and cultural barriers to opening a bank account.
- Inefficiency and expense: Global remittances hit $900 billion in 2024 and the average fee was 6.62%. When a domestic worker sends $500 home, losing $50 to fees means less food on the table.
- Data errors: 20% of consumers have errors in their credit reports, which can increase borrowing costs and deny access to loans.
Traditional lenders also don’t have granular data on the informal economy. In Nigeria’s booming P2P crypto markets, for example, people use stablecoins to save and transact, but none of those repayments count towards a credit score. On-chain credit histories recorded in a transparent and tamper-proof way could capture those behaviors and turn them into reputational capital.
The Emergence of DeFi and Tokenized Credit
Decentralized finance is supposed to remove intermediaries from financial services. In DeFi, smart contracts do lending, borrowing, trading and yield farming. Users hold their assets and interact through permissionless protocols. This already has billions of value. The global DeFi market was $76.35 billion in 2024 and will be $97.04 billion in 2025 and $660.87 billion by 2033, 27.1% compound annual growth.
DeFi’s growth has been driven by stablecoins, digital tokens pegged to fiat currencies. According to CoinLaw’s 2025 adoption report, stablecoin transaction volume was $5.7 trillion across 1.3 billion transactions in 2024 and by mid-2025 was $4.6 trillion across 1 billion transactions. But decentralized stablecoins are only about 20% of the total stablecoin market cap, with DAI over $10 billion. Most stablecoins are centralized, so building a truly decentralized monetary infrastructure is the challenge.
The tokenization boom is another tailwind. Analysts at the Center for Strategic and International Studies estimate that tokenizing real-world assets could be $16 trillion or 10% of global GDP by 2030. Tokenization makes assets divisible, transferable and programmable. On-chain private credit leverages this by turning loan agreements into digital tokens, so fractional investment, automated interest payments and secondary market liquidity. JPMorgan’s Onyx platform has already done nearly $700 billion in short-term loans on blockchain.
Gluwa’s Vision: Building Credit on a Public Ledger
Gluwa is a fintech company founded by Tae Oh in 2019 with a vision to create a borderless financial world. Its flagship product is Creditcoin, a public blockchain that records credit transactions. Instead of storing credit data in a private database, lenders write loan agreements to the Creditcoin blockchain. This creates an immutable, verifiable credit history accessible by multiple lenders. Over time, borrowers can build on-chain reputations that follow them across borders and financial services.
Gluwa’s timeline is fast-paced:
- 2019: Creditcoin mainnet launch, the first open ledger for credit histories.
- 2020: Gluwa Wallet launched, users can hold stablecoins and participate in the network.
- 2021: Inclusive Fintech 50 award winner for impact on financial inclusion.
- 2024: Creditcoin 3.0 released with EVM compatibility, smart contracts and dApps can run on the network. Later that year, Gluwa Nigeria partnered with the Central Bank of Nigeria (CBN) to integrate Credal with eNaira.
Today, Credal is the gateway for fintechs. Lenders can record loans, repayments and default events directly on-chain. Over 5 million loan transactions representing over $80 million in credit have been recorded via Credal. Total Creditcoin network has processed over 4.27 million real-world credit transactions, valued at $79.7 million, serving 337,000 customers in emerging markets.
The results are real. In a Creditcoin case study, borrowers like David, Adesola and Ola used on-chain credit records to get loans for inventory, education and business expansion. Each repayment is publicly verifiable, and new lenders can extend credit without a prior relationship. Trust is embedded in the protocol, not in a central institution.
Nigeria’s Financial Inclusion Experiment: eNaira Meets Credal
Nigeria is a live lab for decentralized credit. As Africa’s biggest economy, the country has perpetual macroeconomic instability. Inflation was 24% in 2023 and the naira has depreciated 75% since 2016. 36% of Nigerian adults are unbanked and remittance can be as high as 8%. So Nigerians went crypto; the country is 2nd in crypto use as of 2024, with P2P exchanges like Paxful and Binance P2P doing billions in volume. Crypto volume in Nigeria was $56.7 billion between July 2022 and June 2023.
The government tried to launch the eNaira in October 2021, hoping that a state-issued digital currency would channel this vibrancy into a regulated system. Adoption has been underwhelming. A 2024 Article IV consultation by the IMF found that only 0.36% of Nigeria’s currency in circulation is in eNaira tokens and the total number of eNaira transactions, 854,512, worth N29.3 billion, is infinitesimal compared to the economy. 13 million wallets have been created but 98.5% are dormant and weekly transaction value is 14,000 transactions worth N923 million. People and merchants use banking apps or cash instead.
That’s where Gluwa’s Credal integration with the eNaira comes in. In March 2024, Gluwa signed a memo with the CBN to integrate Credal with the eNaira infrastructure. The two-pronged goal here is:
1. Create on-chain credit scores for the unbanked. By putting payments and loans on the blockchain, Credal can give reputational capital to the unbanked.
2. Use the eNaira. FinTech lenders will originate loans, collect repayments and make credit decisions with the eNaira wallet. Repayments that are made will create an on-chain credit profile that will encourage users towards CBDC adoption.
If it works, this partnership will be able to turn the eNaira from a dormant app to Nigeria’s standard credit rail connecting centralized digital fiat with decentralized credit.
Tokenization and On‑Chain Private Credit: The Next Frontier
Tokenizing real-world assets (RWAs) is changing finance. CSIS estimates tokenized markets will reach $16 trillion by 2030, 10% of global GDP. Tokenization breaks down assets, whether bonds, invoices or real estate, into digital tokens that can be traded on blockchains. Here are the benefits:
- Transparency: Every ownership change and payment is on-chain, reducing fraud and instant auditability.
- Efficiency: Smart contracts automate interest payments, collateral management and liquidation processes, lowering operational costs.
- Liquidity: Tokenization allows fractional ownership; investors can buy small pieces of loans or assets and trade in secondary markets.
- Accessibility: Historically, private credit was only for institutions; on-chain platforms democratize access, and smaller investors can participate.
This is not a theory. JPMorgan’s Onyx network has processed $700 billion in short-term loans using blockchain. Multiple European and US regulators have signaled support for tokenized securities and the MiCA framework in the EU requires transparency and reserve disclosures for stablecoin issuers. As regulation matures, on-chain credit markets will integrate with traditional finance.
Challenges and Criticisms
Decentralized credit is great, but not a panacea. Wealth concentration is still a problem in crypto; a few addresses control most of the tokens, which goes against the idea of decentralization. DeFi protocols are still vulnerable to smart contract bugs and hacks and without robust identity standards, they can enable fraud or money laundering. Stablecoins are still centralized; 90% of market cap is controlled by issuers like USDT and USDC. DeFi lenders must balance transparency with privacy and consumer protection so that on-chain credit data can’t be misused or used to discriminate against borrowers.
In Nigeria, trust in government and banks is low. Many merchants ignore the eNaira because it offers no obvious advantage over existing banking apps. For Credal to succeed, it must deliver tangible benefits like lower interest rates, faster approvals or access to bigger loans. Regulators will also need to provide clear guidelines on how on-chain credit histories interact with data protection laws and consumer rights. Finally, bridging the gap between crypto enthusiasts and ordinary citizens requires user-friendly interfaces and education.
Decentralized Credit as a Bridge, Not a Disruption
Decentralized credit isn’t about overthrowing the existing financial system; it’s about building a bridge between the informal economy and formal finance. Gluwa’s Creditcoin and Credal network show that public blockchains can record real-world credit transactions at scale, create portable reputations for the unbanked. When combined with national digital currencies like the eNaira, they offer a path to mainstream adoption.
At the same time, tokenization, stablecoins and on-chain private credit is changing how capital is raised, allocated and traded. Market projections of $16 trillion in tokenized assets and hundreds of billions in on-chain lending suggest credit will flow seamlessly across borders and platforms. To get there, industry leaders must address concentration risks, strengthen regulatory compliance and design products that solve real problems for real people.
Gluwa’s challenge to the status quo is optimistic. By combining blockchain transparency with regulated finance legitimacy, it’s trying to unlock credit for millions left outside the system. If decentralized credit can deliver lower costs, broader access and real economic empowerment, it won’t just win awards, it will change lives.
References
1. https://business.cornell.edu/article/2025/08/grassroots-cryptocurrency-adoption/
3. https://www.techloy.com/nigerias-enaira-struggles-with-low-adoption/
5. https://straitsresearch.com/report/decentralized-finance-technology-market
6. https://coinlaw.io/decentralized-stablecoins-adoption-statistics/