Nigeria will demand from digital exchanges to go through a year of "regulatory incubation." The post Regulators Approve Tokenized Real-World Assets in Nigeria appeared first on Tokenist.
Nigeria Seeking to Widen Market Participation
According to Bloomberg, Nigeria’s securities regulator is mulling over allowing tokenized coin offerings on licensed digital exchanges backed by assets such as equity, property, and debt. However, the country is not yet considering allowing crypto-backed coin offerings, said Abdulkadir Abbas, head of securities and investment services at the SEC.
“We always like to start, as a regulator, with a very simple clear proposal before we go into the complex ones.”
-said Abbas.
Digital Exchanges Must Undergo “Regulatory Incubation” for a Year
Since commercial lenders and banks in Nigeria were instructed to stop facilitating crypto-related transactions, the SEC will not allow crypto exchanges to obtain a license in the West African nation until there’s an agreement with the central bank. Instead, the securities regulator is now trying to register fintech firms as digital sub-brokers, fund management firms, robo-advisors, and tokenized coin issues.
Digital exchanges will have to go through a year of “regulatory incubation,” during which they can only provide skeletal services while the SEC monitors their operations. “By the 10th month, we should be able to decide whether to register the firm, extend the incubation period or even ask the firm to stop operation,” said Abbas.
The move aims to attract more tech-savvy citizens to local assets such as equities. Meanwhile, despite the 2021 ban, Nigeria accounts for the largest volume of crypto transactions on peer-to-peer (P2P) exchanges outside the US. The country has more than 200 million residents, 43% below 14.
Do you think Nigeria will eventually lift the crypto ban, given the market’s rapid expansion? Let us know in the comments below.