Key takeaways:
- A report claims that the Nigerian SEC is considering approving exchanges that deal in asset-backed tokens.
- For businesses engaged in cryptocurrency trading, which is prohibited by the nation’s central bank, nonetheless no framework will be developed.
According to reports, the Nigerian Securities and Exchange Commission (SEC) is planning to permit tokenized coin offers on authorised digital exchanges.
As per Abdulkadir Abbas, head of securities and financial services at the Abuja-based commission, the SEC is considering approving tokenized coin offerings on authorised digital exchanges that are backed by assets such as equities, debt, and property but “not cryptocurrency.”
These businesses will serve as crowd-funding middlemen, fund managers, tokenized coin issuers, and sub-brokers for trading tokenized currencies backed by assets.
Any company that applies must first go through a 12-month period of probation during which the SEC will assess its offerings and figure out whether they are qualified to conduct business in the nation.
Although it was previously reported that the Central Bank of Nigeria (CBN) intended to create a regulatory framework to regulate stablecoins and initial coin offerings (ICOs), this has since changed.
While the Central Bank of Nigeria has prohibited commercial banks from providing cryptocurrency services, cryptocurrencies are not prohibited in Nigeria. The Central Bank of Nigeria found refuge in Central Bank Digital Currencies (CBDCs) rather than traditional crypto assets, leading to the introduction of the e-Naira
.
Last year, the SEC released drafted regulations for creating, offering, and keeping digital assets. These regulations served as the foundation for future crypto legislation in a proposed finance bill that also contains rules for crypto asset taxes.
The SEC of Nigeria wants to register fintech companies as digital sub-brokers, mediators for crowdsourcing, fund managers, and issuers of tokenized currency. Until the central bank establishes clear regulations for the cryptocurrency market, the authority won’t register cryptocurrency exchanges.
The Securities and Exchange Commission of Nigeria’s most recent action is a part of continuing attempts to draw the nation’s tech-savvy citizens to domestic assets like equities and stocks. However it is important to note that, Applications for digital exchanges are already being processed by the agency on an experimental basis.
Relationships between local financial institutions in Nigeria and cryptocurrency exchanges are currently prohibited. The regulator has so verified that in order for any exchange to be enrolled, an agreement must be reached with the Central Bank of Nigeria.
