SDF said Monday the investment, made through its Enterprise Fund, will provide Cowrie with resources to continue expanding its operations in emerging markets and further develop payment corridors between Africa and the world, with an initial focus on Nigeria.
The remittance platform, powered by Stellar, allows Nigerians in other countries to send money to their families by converting their funds to NGNT, a token backed by Nigeria’s native naira currency. The funds are transferred directly to the local bank accounts of recipients. Around $27 million has been traded on the platform since NGNT’s launch in 2018.
In Nigeria, people are increasingly turning to crypto as a store of value and a vehicle for cross-border payments. But the SDF investment comes after Nigerian authorities recently banned local banks from servicing crypto firms and ordered financial institutions to close bank accounts tied to crypto platforms. Crypto platforms operating in the country, including Binance and Luno, had to shut down naira deposits and withdrawals. Cowrie halted naira transactions as well. (Luno is a sister company of CoinDesk.)
“Due to the ban, we decided to suspend deposits and withdrawals of NGNT for the time being. We have taken these measures to be prudent and wait for further guidance as we engage with regulators,” Gbubemi Agbeyegbe, technical director at Cowrie, told CoinDesk via an email.
According to Denelle Dixon, chief executive officer at SDF, Cowrie impressed her team by continuing to engage with Nigeria’s regulators in responding to the uncertain regulatory environment for crypto in the country.
“We are here to support them not only through this investment but also through our shared commitment to creating the right policy and regulatory frameworks for blockchain technology by fostering close collaboration and partnership between the public and private sectors,” Dixon said.
Nigeria is typically one of the world’s largest recipients of remittances. But due to the COVID-19 outbreak, remittances to Nigeria in 2020 plunged to the lowest level since 2008, prompting the government to launch a promotion to attract diaspora remittances. The naira4dollar scheme promised to give away 5 naira per U.S. dollar transferred into the country from March through May 2021.