Regulators in Nigeria are reportedly considering allowing digital exchanges that deal in tokens backed by assets such as equity, debt, and property but have no plans to permit cryptocurrency trading.
This news comes from a recent report by Bloomberg, which cited Abdulkadir Abbas, head of securities and investment services at The Securities and Exchange Commission in Nigeria, as the source.
Abbas said that the regulator prefers to start with a simple and clear proposal before moving onto more complex ones.
The SEC in Nigeria has already begun processing applications for digital exchanges, and fintech firms will be registered as digital sub-brokers, crowdfunding intermediaries, robo-advisors, fund managers, and tokenized coin issuers.
During this time, such firms will spend a year in “regulatory incubation,” during which time they’ll be closely monitored by the SEC.
Nigeria’s central bank has long restricted cryptocurrency trading in the country and urged banks in February 2021 to close accounts linked to crypto activities.
However, no regime will be established for issuing licenses to crypto exchanges until standards can be agreed upon with the central bank.
The move to allow exchanges that deal in tokens backed by assets such as equity, debt, and property may help to boost Nigeria’s fintech industry while avoiding the risks associated with cryptocurrencies.
Nigeria has a thriving fintech industry, and the new regulatory framework could help to further its growth by providing a clear path for companies to become regulated and licensed by the SEC.
