By 2023, the Nigerian Exchange Will Use Blockchain to Settle Trades
Nigerian Exchange Ltd. intends to launch a blockchain-enabled exchange platform next year to expand trade and attract new investors. The move follows the Nigerian Securities and Exchange Commission’s establishment of legislation to regulate trade in digital assets, as well as a growing enthusiasm among businesses and policymakers throughout the continent, particularly in Kenya and South Africa, to implement distributed ledger technology. Temi Popoola, the chief executive of Nigeria Exchange Ltd., stated in an interview that the exchange is looking to use blockchain technology to settle capital market transactions.
“For a lot of young and upcoming Nigerians, that is the kind of technology they adopt and we want to see how we can deploy it to grow our market,”
The idea is being implemented after a bitcoin market crash caused by the Terra blockchain’s failure in May. Since its all-time high in November, Bitcoin has lost more than half its value.
Cryptocurrency Transactions Outside of the US
According to Paxful, a Bitcoin marketplace, young Nigerians account for the biggest volume of cryptocurrency transactions outside of the US, but they have mostly neglected the local bourse. In the first three months of this year, Nigerians transacted $185 million in Bitcoins on Paxful, accounting for a quarter of all transactions. According to Popoola, the Nigerian bourse would partner with a technology business and obtain regulatory clearance before launching in 2023.
«Blockchain technology can facilitate different parts of the capital market, whether around the creation of products or facilitation of the Exchange to trade financial assets,»
Popoola believes that digitizing transactions will help attract young buyers looking for a variety of products as well as quick and easy access to the market. MTN Group Ltd.’s Nigeria unit released the bourse’s first complete electronic share offering last year, which was 1.2 times oversubscribed, with 85 percent of the investors under the age of 40.