In a strategic move towards financial innovation, the Nigerian Securities and Exchange Commission (SEC) has granted NASD PLC the approval to launch its groundbreaking Digital Securities Platform (N-DSP) under the Regulatory Incubation (RI) Programme. This comes on the heels of the recent Central Bank of Nigeria’s decision to lift the ban on trading digital assets, signifying a pivotal moment in Nigeria’s financial landscape.
The collaboration between NASD and Blockstation Incorporation has resulted in a robust regulatory framework for crypto and digital assets. Eguarekhide Longe, Managing Director of NASD PLC, stated, “Our mission is to empower millions of young investors, providing access to promising digital assets within a compliant and secure investment environment.”
As Nigeria currently ranks second globally for blockchain wallets, the NASD Digital Securities Platform aims to support high-quality assets thriving on the blockchain. Beyond traditional financial instruments, the platform offers issuers a gateway to raise capital from the public using digital assets, reshaping traditional debt and equity markets.
Longe also highlighted the broader impact, saying, “The opportunity for digital sovereign bonds can provide the necessary capital for infrastructure, addressing FX challenges in the country. The diaspora, with $20 billion in annual remittances, now has a promising window to invest their money back home.”
Moreover, the N-DSP extends its reach to tokenize entertainment assets such as publishing rights, offering the potential to empower and monetize Nigeria’s film industry, including the undercapitalized Nollywood. Additionally, tokenized real estate and mortgage-backed securities (MBS) present solutions to challenges like the 28 million housing deficit, creating substantial market opportunities.
Jai Waterman, CEO of Blockstation, emphasized the transformative impact of merging digital assets with traditional financial institutions. He sees this move as heralding a new era of economic growth and development for Nigeria, stating, “We are confident that this platform will play a pivotal role in propelling Nigeria into a new era of economic growth and development.”
The NASD OTC Securities Exchange, licensed by the SEC, will oversee the N-DSP’s operations during the RI Program. The current focus is on market sensitization and public education before the platform goes live. A consortium of partners, including NASD PLC, Blockstation, Sophus Consulting, and TK Tech Africa, will facilitate this sandbox phase with a limited number of qualified issuers, ensuring a controlled and effective implementation.
By: Montel Kamau
Serrari Financial Analyst
15th January, 2024
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