The Stellar Development Foundation, which is Stellar’s non-profit organization supporting the development of the open-source Stellar network, announced a $750,000 investment in Nigeria-based Fintech startup Cowrie Integrated Systems. Stellar made the announcement via a press release on March 15th.
About Cowrie Integrated Systems
Nigeria-based Cowrie Integrated Systems is a fintech company originally integrated in the United Kingdom and Nigeria, aimed at providing value-added services via electronic payment networks. One of the salient features of this payment solution is the ability it provides to users whose currencies aren’t normally traded on an international level. By using this service, these users get the chance to participate in the global financial market.
The problems which Cowrie Integrated Systems solves
Nigeria is a nation whose traditional money transfer process suffers from inefficiency, high expenditures and lack of accessibility. Despite the country being one of the largest economies in the African continent, more than half of its citizens do not possess a bank account, further excluding them from the global economy. This is where Cowrie plays a key role, by providing an inexpensive and efficient alternative for payment and remittance. The company mainly focuses on providing cross-border payments in emerging markets.
At a time when Nigeria is experiencing public debates and regulatory ambiguity over how digital assets are treated, Cowrie has engaged with relevant regulators to form appropriate regulations of cryptocurrencies while assessing and adapting its present business model. The company has streamlined its offerings to ensure that there is no stoppage in B2B cross-border payment services between Nigeria, the US and Europe, to comply with existing laws and regulations in Nigeria and other African countries.
How will the Stellar Development Foundation’s investment help?
Nigeria has the seventh-largest population in the world and is the fifth largest destination for international remittances. According to Cowrie co-founder Gbubemi Agbeyegbe, the Stellar Development Foundation, which has previously been a partner in cross-border payments, has agreed to support the company via its investment. The company aims to use the investment to build upon its 2020 growth and allow it to seek newer market opportunities.
The Stellar Development Foundation made the investment in Cowrie through its Enterprise Fund, providing Cowrie with the opportunity to leverage resources for operation expansion into emerging markets. The main aim of this project is to develop and maintain payment corridors between the African continent and the rest of the world.
About the Platform
The joint remittance platform between Cowrie and Stellar allows Nigerians outside their home country to send money to their families. They can do this by converting their funds to the NGNT token, which is backed by Nigeria’s fiat currency, the Naira. The recipients receive the funds directly in their local bank accounts. Since the launch of the NGNT token in 2018, an estimated $27 million worth of funds have been traded on the platform.
Stellar’s XLM token is worth $0.4048 as of 18/03/2021 according to coinmarketcap with a market cap of $9,163,303,555. On the other hand, the NGNT token is fiat-backed, pegged to the Nigerian Naira where 1 NGNT = 1NGN.