December 8, 2023

Nigeria’s securities regulator is considering granting the right to operate exchanges that trade in asset-backed licenses. However, the SEC has no intention of allowing crypto trading.

Bloomberg Report The Nigerian Securities and Exchange Commission (SEC) is considering allowing tokenized token offerings on licensed digital exchanges backed by assets, including stocks, debt and property, but has no plans to allow trading in cryptocurrencies.

The agency’s director of securities and investment services, Abdulkadir Abbas, briefed Bloomberg on the SEC’s plans, adding:

As regulators, we always like to start with a very simple and clear proposal and then move on to complex proposals.

Regulators are tentatively processing applications for digital exchanges in an effort to expand market participation in Nigeria, where the central bank currently restricts cryptocurrencies.

Digital exchanges will go through a year of “regulatory incubation,” at which point they can offer limited services under the SEC’s supervision. Abbas told Bloomberg:

By the 10th month, we should be able to decide whether to register the company, extend the incubation period, or even ask the company to cease operations.

Nigeria May Officially Recognize Bitcoin and Other Cryptocurrencies

West Africa, and Nigeria in particular, is responsible for the largest number of cryptocurrency transactions concluded on peer-to-peer platforms outside the United States. The SEC’s decision could lure Nigeria’s digitally savvy crowd to local assets such as stocks, which Bloomberg reported have shunned for years.

Despite central bank restrictions on cryptocurrencies, a new bill to legally recognize the use of bitcoin and other cryptocurrencies is in the works. If passed, the bill would amend the Investment and Securities Act of 2007 and further recognize bitcoin as legal capital for investment purposes.

The SEC will wait to register digital asset exchanges before agreeing with the central bank.

Disclaimer: This article is for informational purposes only.It does not provide or intend to use as legal, tax, investment, financial or other advice.