The Nigerian bourse, Nigeria Exchange Limited, will in 2023 begin the use of blockchain technology for settling trade across its platform in a bid draw young investors, CEO Temi Popoola said, according to a Bloomberg report Friday.
“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,” said the NGX head.
Blockchain is the technology behind cryptocurrency. The innovation will be coming at a time of increasing effort by policymakers and businesses in Africa to leverage the technology to facilitate trade. Capital market watchdog the Securities and Exchange Commission has also unveiled a regulatory framework for digital asset transactions.
Cryptocurrency markets are seeing a plummet after Terra blockchain crashed last month, with Bitcoin shrinking by more than a half since touching an all-time peak about eight months ago.
Nigerian youths account for the biggest cryptocurrency transaction volumes in the world after the US, says Paxful, which offers a platform for trading in Bitcoin but are not inclined to equity trading.
The new decision is likely to be well received by young investors who have lately explored investing in cryptocurrency and foreign markets to side-step Nigeria’s inflationary pressures. Nigeria’s inflation accelerated from 12.3 per cent to 16.8 per cent between the April of 2019 and April 2022.
Mr Popoola said “Blockchain technology can facilitate different parts of the capital market, whether around creation of products or facilitation of the Exchange to trade financial assets.”
His organisation hopes to forge synergy with a technology company and get a go-ahead from regulators ahead of next year’s launch.
The Central Bank of Nigeria placed a bar on facilitating cryptocurrency deals by commercial banks saying it could put the financial system in danger.
He said bringing digitization to trade will pave the way for bringing young investors interested in diversified products into the fold while helping them gain seamless access to the market.
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