Nigeria SEC will support asset-backed tokens: Bloomberg

The Nigeria Securities and Exchange Commission (SEC) will allow tokenizing assets like equities, property, and debt.

According to a Bloomberg May 1 report, the Nigerian SEC’s head of securities and investment services, Abdulkadir Abbas, said the financial regulator is processing applications for digital exchanges and firms. These firms will be sub-brokers for trading tokenized coins backed by assets, fund managers, tokenized coins issuers, and crowd-funding intermediaries.

Any firm that applies will first undergo a probationary period of 12 months, during which the SEC will monitor their services and determine their fitness to operate in the country.

“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,” Abbas said.

Other jurisdictions working on assets tokenization

The idea of tokenizing assets is something that several jurisdictions are already considering. Singapore’s Project Guardian focuses on this in its collaboration between the country and several private financial institutions.

Germany is also set to issue new laws allowing the tokenization of equities registered on the blockchain. The Ministry of Finance referred to the product as crypto shares and claimed the purpose is to support private asset accumulation.

The Nigeria SEC might also have a similar goal by using these digital assets to attract its large youth population to trade local equities.

Nigeria’s crypto adoption remains high.

Despite the country’s central bank’s anti-crypto stand, the industry has thrived in Africa. Recently shuttered p2p exchange Paxful reported that Nigeria accounts for its largest cryptocurrency trading volume after the U.S.

Meanwhile, the largest crypto exchange, Binance, partnered with Nigeria Export Processing Zones Authority (NEPZA) to create the first virtual free zone. The plans for the virtual free zone remain unknown.

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