LAGOS, Nigeria, Aug. 20, 2024 (GLOBE NEWSWIRE) — In a move that signals a significant shift in the global financial landscape, the Nigeria Inter-Bank Settlement System (NIBSS), a payment clearinghouse primarily owned by the Central Bank of Nigeria, has joined Africa’s first regulated blockchain network for payments, built by Nigeria’s decentralized payments infrastructure company Zone. This partnership represents one of the world’s first cases of regulatory participation in a private blockchain consortium and potentially redefines how financial regulation and decentralization intersect on a global scale.
The partnership will see NIBSS leverage Zone’s blockchain network to enhance its Payment Terminal Service Aggregation (PTSA) operations. PTSA is a regulatory oversight function in Nigeria assigned to NIBSS that requires all payments made at point-of-sale (PoS) terminals to go through an aggregator before reaching the cardholder’s bank for authorization. This arrangement ensures enhanced oversight and compliance with the Central Bank of Nigeria’s payment standards. This unprecedented move to adopt blockchain demonstrates NIBSS’ progressive and innovative mindset, which was evident when NIBSS launched one of the world’s first instant money transfer services in 2013. By hosting a blockchain node on the Zone network and deploying relevant smart contracts, NIBSS can decentralize its PTSA function, eliminating the existing central point of failure in transaction routing, while maintaining and even enhancing the regulatory monitoring and reporting capabilities required by the CBN policy on PTSA.
Some of Africa’s largest banks are members of Zone’s blockchain network. It offers several key benefits, such as decentralized routing, which allows for the direct exchange of financial messages between participating banks without intermediaries. In addition, the network facilitates real-time settlement, ensuring instant transaction finality and instant value for each successful transaction. Zone’s network’s automatic reconciliation feature leverages the transparency and consistency of the blockchain to continuously reconcile counterparties and preemptively resolve potential customer disputes in real time.
This development represents a significant step towards integrating blockchain technology into the wider financial world and could inspire regulators worldwide to take similar steps. NIBSS’s direct involvement in Zone’s blockchain network represents a new model for regulatory oversight, enabling real-time monitoring and more efficient enforcement of compliance. The partnership underscores the growing adoption of blockchain technology in traditional financial services and demonstrates the potential of blockchain to gain regulators’ approval, but also to enhance regulatory functions and achieve general acceptance on a global scale.
Premier Oiwoh, MD/CEO of NIBSS, commented: “These partnerships and collaborations with key industry players represent an important milestone in our mission to drive innovation and improve the efficiency of the payments system. The strategic alliances will revolutionize the ecosystem by delivering improved operational efficiency, cost savings and enhanced financial inclusion, ultimately placing Nigeria at the forefront of the global payments space.”
Obi Emetarom, CEO and co-founder of Zone, said: “This partnership with NIBSS is a testament to the transformative power of blockchain technology in payments and the wider financial sector. It demonstrates how blockchain technology can enhance regulatory oversight functions while streamlining operations for service providers and providing a delightful experience for end users.”
As the world moves towards more digital and decentralized financial systems, this partnership is a pioneering example of how traditional financial institutions and new innovative technologies can work together to shape the future of finance. The fact that a central bank subsidiary is joining a fintech-led blockchain consortium, along with other trends such as CBDC pilots and bank-led blockchain initiatives around the world, point to the inevitable impact of blockchain on the way people will handle money in the future.
About NIBSS
The Nigeria Inter-Bank Settlement System (NIBSS) is the backbone of the Nigerian financial system, providing interbank payments and settlement solutions. NIBSS aims to enable secure and efficient payment systems, thereby contributing to the stability and growth of the Nigerian financial sector.
About Zone
Zone is a regulated blockchain network that enables payments and digital currency acceptance. Its Layer-1 blockchain network digitizes fiat payments and enables the transition to digital currencies while connecting previously excluded financial institutions into an all-encompassing payments ecosystem. Zone, Africa’s first decentralized payments network, enables participating institutions to connect directly to each other and conduct payment transactions without intermediaries while fully automating settlement, reconciliation and dispute resolution. The company is partnering with the continent’s brightest minds to lay the foundation for the decentralized future of financial services. Its mission is to connect every monetary store of value by leveraging the power of blockchain.
Contact: [email protected]
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/1c71b90d-ade3-4015-b5bf-1f11ea3465ef
