The Nigerian Securities and Exchange Commission (SEC) is considering a proposal that would allow for the licensing of digital assets, specifically tokens backed by select assets. The head of security and investment at the SEC, Abdulkadir Abbass, announced that the agency is planning to restrict token listings to those backed by assets like equity, debt, or property. Cryptocurrencies backed by bitcoin and Ethereum will not be permitted under this proposal.
The SEC’s goal is to register fintech firms as digital sub-brokers, crowdfunding ventures and to tokenize coin offerings. However, the SEC will not be registering any cryptocurrency exchanges until the Central Bank provides clear regulations for the cryptocurrency market.
Abbass explained that licensed applicants will undergo a year of regulatory incubation, during which the SEC will study their operations and determine how they can best serve the country. The aim of this proposal is to provide a regulatory framework for digital asset trading and offer protection to investors in the market.
The SEC’s decision to permit the listing of tokens based on select assets demonstrates a willingness to embrace the opportunities presented by the digital asset industry while also protecting investors from the volatility and risks associated with cryptocurrencies. By focusing on assets that are more stable and familiar to investors, the SEC can create a more secure and stable market that fosters innovation and growth in the digital asset industry.
What are your thoughts on the Nigerian SEC’s proposal to only allow tokens backed by select assets, and not permit cryptocurrencies backed by Bitcoin and Ethereum? Do you think this regulatory framework will protect investors and promote growth in the digital asset industry? Send us an email at firstname.lastname@example.org if you want us to publicise any Web 3, blockchain, or cryptocurrency projects you are working on in Africa.
Francis Chinedu is a Nigerian-born digital marketing specialist, a bitcoin and blockchain enthusiast, and a YouTuber who enjoys covering events that empower young Africans, especially in technology.