Gluwa, a leading global blockchain company, has announced its intention to work closely with the federal government to create a policy framework that supports the legalization and adoption of cryptocurrencies in Africa’s largest economy.
Gluwa has a proven track record of success in the blockchain industry, having launched several innovative blockchain-based financial products and services across the globe.
Among its accomplishments, Gluwa has built the first blockchain-based credit repository that enables financial institutions all over the world to tackle fraud and provide instant credit scoring via its Creditcoin network.
Additionally, the company invests in global companies utilizing blockchain technology through Gluwa and has committed $35m to the growth of indigenously owned crypto exchanges in Africa.
The announcement comes at a time when Nigeria has seen a surge in cryptocurrency trading and usage, particularly among young people. However, the Nigerian government has been hesitant to fully embrace cryptocurrencies due to concerns about fraud, money laundering, and other criminal activities.
Gluwa believes that with the right policy framework in place, cryptocurrencies can play an important role in driving economic growth and financial inclusion in Nigeria.
“Gluwa is committed to driving innovation and growth in the blockchain industry, and we believe that Nigeria has tremendous potential in this area,” said Tae Oh. “Our proposals have been sent to the Ministry of Finance and we earnestly look forward to working with them to create an environment that fosters innovation, encourages investment, and supports the growth of the Web3 industry.”
The efforts by Gluwa have been welcomed by many in the Nigerian blockchain community, who see it as a positive step towards greater adoption and usage of cryptocurrencies in the country. Many believe that cryptocurrencies can help to address some of the longstanding challenges facing Nigeria’s financial system, such as scarcity of the Naira, high transaction costs, limited access to credit, and lack of a coherent financial inclusion strategy.
The adoption of cryptocurrency in Nigeria has grown at an exponential rate. The country has an unusually high population of active traders, with many citizens now preferring to store their money in various cryptocurrencies due to the constant devaluation of the national currency, the naira. In Chainalysis’ 2020 Cryptocurrency Geography Report, Nigeria ranked eighth in crypto adoption and usage rate among 154 countries included in the study.
The Nigerian government is amenable to the idea of embracing cryptocurrencies, provided that the right regulatory framework is in place. Recently, the Governor of Lagos State; Babajide Sanwo-Olu, made clear his administration’s desire to boost cryptocurrency adoption by unlocking the power of cryptocurrency and the blockchain.
He has also announced proposals to establish a dedicated sandbox regulatory framework for cryptocurrency companies, creating a crypto-focused innovation hub as well as providing incentives for businesses that accept payments in crypto.
The Nigerian Securities and Exchange Commission (SEC) has also begun taking steps toward regulating cryptocurrencies, issuing guidelines for initial coin offerings (ICOs) and other cryptocurrency-related activities. Under SEC’s new rules, all crypto exchanges providing service to Nigerians are now required to secure a permit, which gives the Commission access to its records.
Exchanges are expected to submit weekly and monthly trading information as well as quarterly and annual financial and compliance reports.
“I am excited to see Gluwa take this bold step towards supporting the adoption and usage of cryptocurrencies in Nigeria,” said Lolade Babalola, a blockchain enthusiast based in Lagos. “I believe that cryptocurrencies have the potential to transform the financial landscape in Nigeria and across the African continent, and I look forward to seeing what the future holds.”
In 2021, the Central Bank of Nigeria issued a directive to all commercial banks demanding the closure of all accounts belonging to crypto exchanges and hitherto fined defaulters.
However, in a circular released by the bank and signed by Osita Nwanisobi, immediate past director of Corporate Communications at the apex bank and sighted by newsmen in Abuja, he commented that, “its actions thus far are not in any way, shape or form inimical to the development of Fintech and technology-driven payment systems.
To the contrary, the Nigerian financial system has evolved significantly over the last decade, leapfrogging many of its counterparts in emerging, frontier and advanced economies propelled by reforms driven by the CBN.
This is evident from the variety of participants, products, channels, cutting-edge technology in the payments system. It is also validated by the astronomical growth of volume/value of transactions and the fact that Nigeria is an investment destination of choice for international financial technology companies because of CBN’s policies, which have created an enabling investment environment in the payments system.
These developments in the payments and settlements space have helped to grow the financial system, improving financial inclusion, the quality and convenience of financial services and has also created millions of direct and indirect jobs for the teeming youth population.”
“Gluwa’s announcement is a positive development for the African blockchain industry, with Nigeria at the forefront,” said Tebogo Thobeje, founder of the Blockchain Africa Society. “It shows that there is growing interest and support for cryptocurrencies among businesses and investors in Nigeria. We hope that the Nigerian government will take a proactive approach to supporting the growth of the blockchain industry, and we look forward to working with Gluwa and other important stakeholders to achieve this goal.”
The Minister of State for the Ministry of Finance, Budget, and National Planning; Clem Agba, has remarked that the Federal Government is up to the task of regulating the cryptocurrency industry. According to him, the Federal Government is optimistic about the numerous possibilities the crypto industry currently provides to ordinary Nigerians.
He noted that cryptocurrencies could be the biggest disruptor in the finance sector, but government needed to play a supervisory role in guiding the industry. “Regulation of the industry doesn’t necessarily mean a giant hammer slamming down on activities but rather to optimise conditions for growth, tailored towards the industry,” he said.
According to him, there is a need for the creation of a new regulatory body to oversee the regulation of crypto activities in the country. Agba said, “Nigeria’s Securities and Exchange Commission is currently in talks with the Central Bank of Nigeria to chart clearer path towards understanding and regulation of the crypto space.”
Ahmed Gloria Kufeji, a director at the Ministry of Finance expressed optimism for the industry in a chat with our correspondent, “We are pleased to see interest from companies like Gluwa in supporting the growth and development of the blockchain industry in Nigeria.
“We recognize the potential of blockchain technology to drive economic growth and financial inclusion, and we are committed to creating a policy framework that encourages innovation and investment while also protecting consumers and preventing criminal activities.”
“We believe that cryptocurrencies have the potential to transform the financial landscape in Nigeria and the African continent,” said Tae Oh, CEO of Gluwa. “By working closely with the Nigerian government, we hope to create a policy framework that encourages the responsible and regulated use of cryptocurrencies while prioritizing the protection of consumers and preventing illicit activities.”