The largest stock exchange in Nigeria – Nigerian Exchange Ltd. – will reportedly roll out a blockchain-enabled trading platform next year to facilitate the capital market and attract young investors. The company stated that trade settlements will be the main purpose of the distributed-ledger tech.
Bloomberg reports that the exchange will be partnering with a technology company in order to get approvals from Nigerian watchdogs before 2023.
Temi Popoola – the CEO of Nigerian Exchange Ltd. – viewed blockchain technology as a facilitator of the financial market, enabling an “effective way of trading financial assets.” He added the deployment could allow young investors to have “fast and easy access to the market,” as they have accounted for the majority of crypto users in the country.
The firm’s first electronic share offering, issued by MTN Group Ltd.’s Nigeria unit last year, was 1.2 times oversubscribed, with 85% of the investors under 40 years old.
It’s still unclear whether the exchange will be directly implicated with cryptocurrency. If so, it has to operate in compliance with Nigeria’s SEC and the regulatory framework imposed by the country’s central bank.
The Central Bank of Nigeria banned the banking sector’s conduct of crypto transactions last year while allowing individuals to trade them. The bank cited cryptocurrency as a threat to the financial system. Nigeria’s SEC said at the time it was well-equipped to provide the required regulations and would live up to protect investors.
Bloomberg reported that African policymakers and businesses have adopted blockchain technology to various purposes. Nigeria will soon be able to use the eNaira to pay its bills, subscribe to TV and book flights, just one year after it was established.
South African authorities have been in contact with the fintech industry to integrate the technology into their financial markets.