The Nigerian Securities and Exchange Commission (SEC) is reviewing applications for digital exchanges on a trial basis to expand market participation in the country.
According to Abdulkadir Abbas, head of securities and investment services at the Abuja-based commission in an interview, the SEC is considering permitting tokenized coin offerings on licensed digital exchanges that are backed by assets including equity, debt, property but “not crypto” in line with the restriction on crypto related transactions in the country.
“We always like to start, as a regulator, with a very simple clear proposal before we go into the complex ones.”
Nigeria’s SEC aims to register fintech firms as digital sub-brokers, crowdfunding intermediaries, robo-advisors, fund managers, and tokenized coin issuers. However, it will not register crypto exchanges until there is an agreement on standards with the central bank, which prohibited commercial banks from facilitating transactions in 2021.
Digital exchanges that intend to operate in Nigeria will undergo a year of regulatory incubation, monitored by the SEC to study their operations and fitness to provide services in the country. The commission will make a determination by the 10th month, either to register the firm, extend the incubation period, or ask the firm to stop operations.
