Nigeria’s securities regulator, the Nigerian Securities and Exchange Commission (SEC), is reportedly planning to introduce new regulations for digital asset platforms. As part of the new rules, the SEC is considering allowing licensed digital exchanges to list tokens backed by certain assets such as equity, debt, or property.
Cryptocurrencies like Bitcoin (BTC) and Ether (ETH), however, will not be among the assets authorized for listing, according to Abdulkadir Abbas, the head of securities and investment at the Nigerian SEC.
The Nigerian SEC will also aim to register fintech firms as digital sub-brokers, crowdfunding intermediaries, fund managers, and tokenized coins issuers. However, the regulator will not register crypto exchanges until the central bank provides clear regulations for the crypto market.
License applicants would undergo a year of “regulatory incubation,” allowing the SEC to study their operations and render their services in the country, noted Abbas.
The Nigerian SEC’s head of securities and investment further added that the authority will take at least 10 months to determine whether to register a digital asset-related company. By the end of the 10th month, the SEC should be able to make a determination whether to register the firm, extend the incubation period, or even ask the firm to stop operation.
It is worth noting that the Central Bank of Nigeria banned local banks from providing services to cryptocurrency-related platforms in early 2021, citing high risks associated with trading cryptocurrencies like Bitcoin. The central bank also promised to impose strict penalties for any lender or financial institution failing to comply with the directive.
Despite the ban, Nigeria has emerged as one of the most active countries in terms of adoption and curiosity about Bitcoin and other cryptocurrencies, ranking second by search interest for the keyword “Bitcoin,” behind El Salvador, which adopted Bitcoin as legal tender in 2021, according to data from Google Trends. Other jurisdictions in the top-five crypto-curious countries list include Slovenia, Netherlands, and Switzerland.
Nigeria’s SEC is preparing to introduce new regulations for digital asset platforms, with a focus on allowing licensed digital exchanges to list tokens backed by certain assets such as equity, debt, or property. Cryptocurrencies such as Bitcoin and Ether, however, will not be among those assets authorized for listing.
The Nigerian SEC also aims to register fintech firms as digital sub-brokers, crowdfunding intermediaries, fund managers, and tokenized coins issuers, but crypto exchanges will not be registered until the central bank provides clear regulations for the crypto market.