Nigeria’s securities regulator is weighing allowing the trading of tokens backed by equity, debt, and property, but is still averse to ‘crypto,’ a new report has revealed.
The West African country is a regional leader in digital asset adoption and one of the world’s largest peer-to-peer trading hubs. However, it still lacks a legal framework for the industry, with the Central Bank of Nigeria (CBN) even barring banks from servicing digital asset firms.
The Securities and Exchange Commission (SEC) seeks to remedy the situation, according to Abdulkadir Abbas, the agency’s head of securities and investment services.
“We always like to start, as a regulator, with a very simple clear proposal before we go into the complex ones,” Abbas told Bloomberg in an interview. The stance is not new. Last December, the SEC’s Director-General Lamido Yuguda revealed the agency was working on a regulatory framework for digital assets, “not necessarily crypto.”
“The commission is in the business of protecting investors, not in the business of speculation,” Yuguda stated at the time.
Abbas says the stance hasn’t changed. However, in addition to the proposed tokenization framework, the agency intends to register digital asset firms as fund managers, digital sub-brokers, robo-advisors, and tokenized coin issuers. It will refrain from registering ‘crypto exchanges’ until it gets regulatory clarity from the CBN. The central bank has been anti-Bitcoin for years, and aside from the banking ban, it has even incentivized users of avenues that compete with digital assets.
Digital exchanges that want to secure registration must undergo a 12-month “regulatory incubation” period. During this time, they will only be allowed to offer skeletal services under the supervision of the SEC. The agency will use the period to study the exchange’s fitness to provide its services and the pattern of its operations, Bloomberg reports.
“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 told the outlet.
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