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 main application of the distributed-ledger technology will be in trade settlements, the company revealed.
According to Bloomberg, the exchange will partner up with a technology company, aiming to receive approvals from Nigerian watchdogs by 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.
Last year, the Central Bank of Nigeria prohibited the banking sector from conducting crypto transactions while allowing individuals to trade them. The organization cited cryptocurrency as a risk 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 noted that African businesses and policymakers have actively adopted blockchain technology for various applications. Only a year after its CBDC was introduced, Nigeria is set to enable locals to pay their bills, TV subscriptions, and flight tickets using the eNaira.
Meanwhile, South African authorities are engaging with the fintech industry to incorporate the technology into the financial markets.