Nigeria’s biggest stock exchange – Nigerian Exchange Limited – is expected to roll out a trading platform which is blockchain-enabled. This, according to reports and will be functional next year. The trading platform will facilitate capital market activities and is designed to attract investors who are young. The primary application will be in settling trades and work based on distributed ledger technology, according to the company.
Bloomberg also reported that the exchange is partnering with a technology company with the aim of receiving approval from watchdog organizations by the year 2023. CEO Temi Popoola of the Nigerian Exchange is of the view that blockchain technology is a good facilitator of the financial market. It is an effective medium to trade financial assets from anywhere in the country. Deploying this platform will make it easy for younger investors to access the market.
The good news is that the company’s very first electronic shares issued by the MTN Group (Nigeria unit) had 1.2 times more investors and 85% of investors under the age of 40. It is not clear yet if the exchange will trade in crypto. If it plans to do so, it will have to comply with the country’s SEC and central bank regulations.
In 2021, the Central Bank of Nigeria issued a ruling expressly prohibiting banks from carrying out any crypto related transactions. It permitted individuals to do so while citing crypto as a risk to its financial system. The SEC in Nigeria said that it could protect investors as it was equipped to provide and enforce needed regulations.
Reports indicate that many African businesses and law makers actively use blockchain technology for multiple applications. Ever since the Central Bank introduced the CBDC, it is now in the process of enabling citizens to pay their regular bills.