1. PixelPlaygroundHome
  2. Blockchain Briefs

The Nigerian SEC and Token Issuance on Licensed Digital Exchanges

• Blockchain Briefs • 130 views

According to reports, Abdulkadir Abbas, head of securities and investment services at the Nigerian Securities and Exchange Commission (SEC), stated that the Nigerian SEC is conside

The Nigerian SEC and Token Issuance on Licensed Digital Exchanges

According to reports, Abdulkadir Abbas, head of securities and investment services at the Nigerian Securities and Exchange Commission (SEC), stated that the Nigerian SEC is considering allowing token issuance on licensed digital exchanges, which are supported by assets including equity, debt, property, but not cryptocurrency. The Nigerian SEC aims to register fintech companies as digital sub brokers, crowdfunding intermediaries, robot advisors, fund managers, and token issuers. It will not register cryptocurrency exchanges until an agreement is reached with the central bank on standards. Abbas stated that interested digital exchanges will undergo a one-year regulatory incubation period, during which they will only provide skeleton services supervised by the SEC to study their operational model and suitability for providing services in the country. Meanwhile, Abbas stated that by the 10th month of the incubation period, it will be possible to decide whether to register the company, extend its incubation period, or require the company to cease operations.

Nigerian SEC plans to allow licensed digital exchanges to issue tokens, with a regulatory incubation period of one year

Introduction

The Nigerian Securities and Exchange Commission is considering allowing token issuance on licensed digital exchanges that are backed by assets such as equity, debt, and property. The move is aimed at registering fintech companies as digital sub brokers, crowdfunding intermediaries, robot advisors, fund managers, and token issuers.

How the Nigerian SEC Will Register Fintech Companies

The SEC will not register cryptocurrency exchanges until they have reached an agreement with the Central Bank of Nigeria on standards. In the meantime, interested digital exchanges will go through a one-year regulatory incubation period. During this period, they will only be permitted to provide skeleton services that are supervised by the SEC.
The regulatory incubation period will be used to study their operational models and suitability for providing services in the country. By the 10th month of the incubation period, it will be possible to decide whether to register the company, extend its incubation period, or require the company to cease operations.

Token Issuance on Digital Exchanges

The token issuance will only be allowed on licensed digital exchanges that support assets such as equity, debt, and property. Cryptocurrency will not be included in the list of supported assets. The SEC aims to ensure that any token issued on a licensed exchange is backed by an underlying asset. This will provide investors with some level of protection against fraud and scam schemes.

Token Issuance Backed by Assets

Token issuance backed by assets is expected to create a more transparent and safer investment environment compared to cryptocurrency. According to Abbas, it will be possible to provide investors with more information about the assets that back the tokens. This will increase investor confidence and hopefully attract more people to invest in the Nigerian stock market.

Conclusion

The Nigerian Securities and Exchange Commission’s decision to allow token issuance on licensed digital exchanges is a positive step towards creating a safer and more transparent investment environment for investors. It is expected that the move will attract more people to invest in the Nigerian stock market. Digital exchanges interested in providing token issuance services will need to undergo a one-year regulatory incubation period to study their operational model and suitability for providing services in the country.

FAQs

1. What is the Nigerian SEC’s stance on cryptocurrency exchanges?
– The SEC will not register cryptocurrency exchanges until an agreement is reached with the central bank on standards.
2. What is the benefit of token issuance backed by assets?
– Token issuance backed by assets creates a more transparent and safer investment environment compared to cryptocurrency.
3. What happens during the regulatory incubation period for interested digital exchanges?
– During the regulatory incubation period, interested digital exchanges will only be permitted to provide skeleton services that are supervised by the SEC.

This article and pictures are from the Internet and do not represent Fpips's position. If you infringe, please contact us to delete:https://www.fpips.com/19494/

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.

Like (0)
Previous 05/01/2023 06:57
Next 05/01/2023 08:01

Recommended articles