In a groundbreaking move, the Securities and Exchange Commission (SEC) has granted approval to NASD Plc, the Over-the-Counter (OTC) Securities Exchange operator, to introduce its cutting-edge Digital Securities Platform (N-DSP).
This platform is set to revolutionize the landscape of digital securities by redefining how they are issued, traded, and settled. The N-DSP aims to democratize access to capital markets by leveraging blockchain technology, providing enhanced accessibility, and minimizing associated costs.
In collaboration with Blockstation Incorporated under the Regulatory Incubation (RI) Programme, NASD worked closely with the SEC to establish a robust regulatory framework for crypto and digital assets.
Blockstation, serving as the technology partner, will contribute a robust enterprise blockchain-driven platform. Their focus includes originating and popularizing regulated tokenized Initial Public Offerings (IPOs), commonly referred to as Security Token Offerings (STOs).
Throughout the Regulatory Incubation Program, the N-DSP’s operations will fall under the regulatory oversight of the SEC, in conjunction with participating institutions like custodians, brokers, and issuing houses.
This significant milestone represents a commendable leap forward in fostering innovation, transparency, and inclusivity in the Nigerian capital markets. The move follows the recent lifting of the ban on digital asset trading, including cryptocurrencies, by the Central Bank of Nigeria (CBN) last month. The evolving landscape suggests a promising era for digital securities and blockchain technology in Nigeria’s financial ecosystem.
Speaking on the potential of the platform, the Managing Director of NASD Plc, Mr Eguarekhide Longe, said it would allow fresh investors to enter the capital market due to attractive digital offerings.
“Our objective is to empower millions of young investors with access to promising digital assets, ensuring they can confidently purchase in a completely compliant and secure investment environment.
“Nigeria currently ranks second globally for blockchain wallets, and our Exchange is poised to support high-quality assets thriving on the blockchain,” he stated.
Through this nascent approach, NASD is providing issuers with a gateway to raise capital from the public using digital assets, marking a groundbreaking initiative.
This endeavour is set to directly influence traditional debt and equity markets, along with traditionally illiquid assets. The opportunity for digital sovereign bonds can provide the necessary capital for infrastructure while helping resolve FX challenges in the country.
The firm is also looking to tap into the diaspora, which currently provides $20 billion in annual remittances, which can be a promising way to invest their money back home.
Adding his input, the chief executive of Blockstation, Mr Jai Waterman, said, “In a nation marked by dynamic economic forces, the confluence of digital assets and traditional financial institutions signals a transformative era for Nigeria’s economic landscape.
“The integration of cutting-edge technology to address the needs of, and captivate the substantially large youthful population, is set to unlock previously untapped markets. We are confident that this platform will play a pivotal role in propelling Nigeria into a new era of economic growth.”