Nigeria’s SEC Mulls Over Asset-Backed Tokens but Not Crypto

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• Nigeria May Officially Recognise Bitcoin and Other Cryptocurrencies

Nigeria’s securities regulator is considering granting exchanges that deal in asset-backed licenses to operate. The SEC, however, has no intention of allowing crypto trading.

Bloomberg reports that Nigeria’s Securities and Exchange Commission (SEC) is considering permitting tokenised coin offerings on licensed digital exchanges backed by assets, including equity, debt, and property, but has no plans of permitting crypto trading.

Abdulkadir Abbas, head of securities and investment services at the agency, informed Bloomberg of SEC’s plan and added:

We always like to start, as a regulator, with a very simple clear proposal before we go into the complex ones.

The regulator is processing applications for digital exchanges on a trial basis in an effort to broaden market participation in Nigeria, where the central bank currently restricts cryptocurrencies.

Digital exchanges will undergo one year of “regulatory incubation,” where they can offer limited services under the SEC’s supervision. Abbas said to Bloomberg:

By the 10th month, we should be able to make a determination whether to register the firm, extend the incubation period or even ask the firm to stop operation.

Nigeria May Officially Recognise Bitcoin and Other Cryptocurrencies

West Africa, particularly Nigeria, is responsible for the most significant volume of crypto transactions concluded on peer-to-peer platforms outside of the US. The SEC’s decision may attract Nigeria’s digital-savvy population to local assets such as equities which have, according to Bloomberg, been shunned for years.

Despite the central bank’s restriction on cryptocurrencies, a new bill which would legally recognise the use of Bitcoin and other cryptocurrencies is in the works. If passed, the bill would amend the 2007 Investments and Securities Act and further recognise Bitcoin as legal capital for investment purposes.

The SEC will wait to register digital asset exchanges until it agrees with the central bank.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.