The Nigerian Exchange (NGX) Ltd. is planning to launch a blockchain-enabled exchange platform in 2023. Per a report by Bloomberg on Friday, NGX said it aims to use the platform in settling capital market transactions.
Temi Popoola, the CEO of NGX noted the move is geared towards attracting young investors to the local market thereby increasing trade.
“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,” he added.
Popoola further stated that deploying sophisticated technology will help attract young investors looking for diversified products and easy ways to enter the local market. NGX will be partnering with a technology company to deploy and complete every regulatory requirement before launching the initiative next year.
Gbemisola Alonge, a tech policy analyst at Stears in Lagos, noted that “it’s almost impossible to think of blockchain without including cryptocurrency, so if the adoption is not in agreement with the central bank’s position, there may be skepticism from investors.”
Last year, the Nigerian Central Bank (CBN Nigeria) released a circular banning commercial banks in the country from facilitating crypto transactions, noting that the asset class poses a threat to the financial system. Recall that CBN also recently fined four commercial banks for facilitating crypto payments.
Crypto Adoption in Nigeria Spikes Despite Ban
Despite the ban enforced by CBN, crypto transactions in the country are still on the rise. According to data from blockchain analytics platform UsefulTulips, Nigeria became the biggest crypto peer-to-peer (P2P) market in Africa following the ban.
Paxful, a P2P trading platform, Paxful reported that Nigeria became its biggest market after witnessing a significant surge in its trading volume. Since local banks are prohibited from facilitating crypto transactions, investors in the country have to turn to P2P platforms.
Meanwhile, a recent survey conducted by mainstream cryptocurrency exchange KuCoin revealed that 35% of the adult population in Nigeria currently hold or have traded cryptocurrencies in the last six months.
