- Nigeria was one of the fastest crypto adopters in the region before the central bank reinforced its restrictive rule.
- The SEC is focusing on digital assets that protect investors, according to Director-General Lamido Yuguda, who added that the commission is looking to develop the trade of 50 digital assets by 2025.
Nigeria’s Securities and Exchange Commission (SEC) is reportedly considering permitting tokenized coin offerings that are backed by equity, debt or property but not crypto, on licensed digital asset exchanges, according to a report by Bloomberg. Abdulkadir Abbas, the head of securities and investment services at the Abuja-based commission, reportedly said that the regulator likes to start with a simple, clear proposal before moving on to more complex ones.
SEC’s Proposal for Tokenized Coin Offerings
The SEC is said to be processing applications for digital exchanges on a trial basis. During which the firms will undergo a year of “regulatory incubation” with limited services offered. And SEC monitoring to determine their fitness to provide services. Abbas said that by the 10th month, the regulator should be able to make a determination as to whether to register the firm. Also extend the incubation period, or ask the firm to stop operations.
The SEC is unlikely to register digital asset exchanges until it reaches an agreement with the country’s central bank, which has prevented local financial institutions from interacting with crypto services providers. Despite the central bank’s resistance, a new bill is reportedly being considered that could recognize crypto as capital for investment.
Nigeria’s SEC has stated that it will not permit cryptocurrencies on these exchanges. Abdulkadir Abbas, head of securities and investment services at the SEC. Explained that the regulator likes to start with simple proposals before moving on to more complex ones. The SEC is also currently processing applications for digital exchanges on a trial basis. Planned with a one-year “regulatory incubation” period. During which they will be under SEC monitoring to determine their ability to provide services.
The regulator aims to make a determination on whether to register the firm, extend the incubation period, or ask the firm to stop operation by the tenth month.
The SEC’s plans for digital asset exchanges may be hampered by the nation’s central bank. In which has prohibited local financial institutions from interacting with crypto services providers.
SEC in digital asset exchanges
As a result, the SEC will not start registering digital asset exchanges until it reaches an agreement with the central bank. Despite this, there have been attempts to include crypto in the scope of regulations. With a new bill in the works that could recognize crypto as capital for investment. While the SEC‘s proposed move towards tokenized coin offerings is a step towards embracing digital assets. It remains to be seen whether they will consider cryptocurrencies in the future.
Nigeria’s Securities and Exchange Commission (SEC) will not include cryptocurrencies in its efforts to enhance digital asset. Trading until regulators agree on standards that safeguard investors, according to Director-General Lamido Yuguda. The SEC is focusing on digital assets that provide protection to investors as crypto exchanges currently lack access to the banking platform required to drive their trades in Nigeria.
Yuguda made the comments at a press conference in Lagos, Nigeria’s commercial hub. Adding that the commission is looking to develop the trade of 50 digital assets by 2025. The SEC‘s focus on digital assets that protect investors suggests a cautious approach to regulating the sector. As it seeks to create a safe and secure trading environment for investors in Nigeria.