Nigeria’s Largest Stock Exchange Plans to Adopt Blockchain for Settling Trades

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The largest stock exchange in Nige­ria – Niger­ian Exchange Ltd. – will report­ed­ly roll out a blockchain-enabled trad­ing plat­form next year to facil­i­tate the cap­i­tal mar­ket and attract young investors. The main appli­ca­tion of the dis­trib­uted-ledger tech­nol­o­gy will be in trade set­tle­ments, the com­pa­ny revealed.

  • Accord­ing to Bloomberg, the exchange will part­ner up with a tech­nol­o­gy com­pa­ny, aim­ing to receive approvals from Niger­ian watch­dogs by 2023.
  • Temi Popoola – the CEO of Niger­ian Exchange Ltd. – viewed blockchain tech­nol­o­gy as a facil­i­ta­tor of the finan­cial mar­ket, enabling an “effec­tive way of trad­ing finan­cial assets.” He added the deploy­ment could allow young investors to have “fast and easy access to the mar­ket,” as they have account­ed for the major­i­ty of cryp­to users in the country.
  • The firm’s first elec­tron­ic share offer­ing, issued by MTN Group Ltd.’s Nige­ria unit last year, was 1.2 times over­sub­scribed, with 85% of the investors under 40 years old.
  • It’s still unclear whether the exchange will be direct­ly impli­cat­ed with cryp­tocur­ren­cy. If so, it has to oper­ate in com­pli­ance with Nigeria’s SEC and the reg­u­la­to­ry frame­work imposed by the country’s cen­tral bank.
  • Last year, the Cen­tral Bank of Nige­ria pro­hib­it­ed the bank­ing sec­tor from con­duct­ing cryp­to trans­ac­tions while allow­ing indi­vid­u­als to trade them. The orga­ni­za­tion cit­ed cryp­tocur­ren­cy as a risk to the finan­cial sys­tem. Nigeria’s SEC said at the time it was well-equipped to pro­vide the required reg­u­la­tions and would live up to pro­tect investors.
  • Bloomberg not­ed that African busi­ness­es and pol­i­cy­mak­ers have active­ly adopt­ed blockchain tech­nol­o­gy for var­i­ous appli­ca­tions. Only a year after its CBDC was intro­duced, Nige­ria is set to enable locals to pay their bills, TV sub­scrip­tions, and flight tick­ets using the eNaira.
  • Mean­while, South African author­i­ties are engag­ing with the fin­tech indus­try to incor­po­rate the tech­nol­o­gy into the finan­cial markets.
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