NIBSS Joins Zone’s Blockchain Network for Payments
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Nigeria Inter-Bank Settlement System Joins Blockchain Network
In a move that signals a significant shift in the global financial landscape, the Nigeria Inter-Bank Settlement System (NIBSS), a payments clearing house primarily owned by the Central Bank of Nigeria, has joined Africa’s first regulated blockchain network for payments, built by Nigeria’s decentralised payment infrastructure company Zone. This partnership marks one of the world's first instances of regulatory participation in a private blockchain consortium, potentially redefining how financial regulations and decentralisation intersect on a global scale.
Benefits of the NIBSS and Zone Partnership
The partnership involves NIBSS utilising Zone’s blockchain network to enhance its Payment Terminal Service Aggregation (PTSA) operations. PTSA is a regulatory oversight function in Nigeria assigned to NIBSS, requiring all payments made at Point-of-Sale (PoS) terminals to pass 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.
Decentralisation and Enhanced Monitoring
This unprecedented move to adopt blockchain demonstrates NIBSS’s progressive and innovative disposition, which became evident when NIBSS launched one of the world’s first instant funds transfer services. Hosting a Blockchain node on the Zone Network and deploying relevant smart contracts will allow NIBSS to decentralise its PTSA function, eliminating the existing central failure points in transaction routing while preserving and enhancing the regulatory monitoring and reporting capabilities required.
Zone’s Blockchain Network Advantages
Zone’s blockchain network includes some of Africa’s biggest banks and offers key advantages such as decentralized routing. This feature enables direct exchange of financial messages between participating banks without an intermediary. Additionally, the network facilitates real-time settlement, ensuring instant transaction finality and immediate value for each successful transaction. The automated reconciliation feature of Zone’s network leverages the transparency and consistency of Blockchain to continuously reconcile counterparties and preemptively resolve potential customer disputes in real-time.
Inspiring Global Adoption
This development represents a significant step towards integrating blockchain technology into mainstream finance, potentially inspiring similar moves by regulatory bodies worldwide. NIBSS's direct involvement on Zone’s blockchain network demonstrates a new model for regulatory oversight, allowing real-time monitoring and more efficient compliance enforcement. The partnership underscores the growing acceptance of blockchain technology in traditional financial services and highlights the potential for blockchain to gain regulator buy-in while enhancing regulatory functions.
Leadership Insights
Premier Oiwoh, MD/CEO of NIBSS, commented: "These partnerships and collaborations with key industry players represent a significant milestone in our mission to drive innovation and enhance the efficiency of the payment system. The strategic alliances will revolutionize the ecosystem, offering improved operational efficiency, cost savings, and enhanced financial inclusion, ultimately positioning Nigeria at the forefront of the global payment space."
Obi Emetarom, CEO and Co-founder of Zone, added: "This partnership with NIBSS is a testament to the transformative power of blockchain technology in payments and the financial sector. It demonstrates how blockchain can enhance regulatory oversight functions while streamlining operations for service providers, delivering delightful experiences to end-users."
About NIBSS and Zone
The Nigeria Inter-Bank Settlement System (NIBSS) is the backbone of the Nigerian financial system, providing interbank payments and settlement solutions. NIBSS is committed to facilitating secure and efficient payment systems, contributing to the stability and growth of Nigeria's financial sector.
Zone is a regulated blockchain network that enables payments and the acceptance of digital currencies. Its Layer-1 Blockchain network digitizes fiat payments while connecting previously excluded financial institutions into an all-inclusive payment ecosystem. The Company is collaborating with leading thinkers across Africa to establish a decentralized future for financial services. Its mission is to connect every monetary store of value by harnessing the power of blockchain.
Contact: oosoba@zonenetwork.com
Frequently Asked Questions
What is the partnership between NIBSS and Zone about?
The partnership involves NIBSS using Zone's blockchain network to enhance its payment operations and regulatory oversight through decentralization.
What does PTSA stand for and its relevance?
PTSA stands for Payment Terminal Service Aggregation, which is a regulatory oversight function requiring payments to pass through an aggregator before bank authorization.
How does this technology improve transaction processing?
This technology enhances transaction processing through decentralized routing, real-time settlement, and automated reconciliation, ensuring efficiency and transparency.
What role does blockchain play in regulatory oversight?
Blockchain enhances regulatory oversight by allowing real-time monitoring of transactions, streamlining compliance enforcement, and increasing transparency.
How does this partnership position Nigeria in the global payment space?
This partnership positions Nigeria at the forefront of global payment innovations, showcasing the integration of traditional financial systems with innovative blockchain technology.
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