The talk of blockchain is still unexplored territory many governments throughout Africa have shied away from blockchain, while a select few are planning to use its applications to boost their economies.
In Nigeria, however, this is not the situation. The Central Bank of Nigeria (CBN) has warned Nigerians against investing in cryptocurrencies, claiming that they are not acknowledged as legal cash in the country.
Recently, Nigeria’s stock exchange, in its recent drive, to combine crypto and blockchain, wants to launch a blockchain-enabled exchange platform in 2023 to enhance trade and attract new investors to the market.
The action comes after the Nigerian Securities and Exchange Commission issued regulations to govern the trading of digital assets.
Nigeria has also announced intentions to carry out a national digital wallet to enable for worldwide commercialization of intellectual property (IP) forms, following the establishment of Africa’s first CBDC in October 2021.
For the exchange, blockchain technology will be used in the settlement of capital market transactions.
Temi Popoola, the CEO of the Nigeria Stock Exchange (NSE), said that for many young and rising Nigerians, that is the kind of technology they adopt and want to see how they can employ it to expand the market.
Nigerians aged 19 and under account for 54% of the population. According to Paxful, a major peer-to-peer cryptocurrency exchange, young Nigerians account for the largest amount of bitcoin transactions outside the United States.
In the first three months of the year, Nigerians transacted $185 million in Bitcoins on the platform, accounting for a quarter of all transactions.
Before opening in 2023, the Nigerian bourse will partner with a technology company and receive regulatory approval, according to Popoola.
The CEO of the Nigeria Stock Exchange also stated that blockchain technology can help with several aspects of the capital markets, such as product creation and the ability of the Exchange to exchange financial assets.
According to Popoola, digitizing transactions would help entice youthful shoppers looking for a variety of products, as well as quick and easy market access.
MTN’s Nigeria affiliate offered the bourse’s first fully electronic share offering in 2021, which was 1.2 times oversubscribed, with 85 percent of the investors under the age of 40.
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