The Securities Exchange Commission, has said that the capital market regulator currently has over 50 blockchain and cryptocurrency organisations applying to get licences to operate.
The SEC director general, Emonotimi Agama, who disclosed this at the Business Day Blockchain Conference held in Lagos on Wednesday, noted that since the approval in principle of Busha Digital Limited and Quidax Technologies Limited, two cryptocurrency platforms, a plethora of applications have been submitted to the commission.
Agama also said that the Commission’s approach to Digital Asset Regulation recognises the potential of blockchain and digital assets to revolutionise the capital markets and shape the Nigerian economy.
Speaking at the Blockchain Conference 2024, themed: ‘Building Africa’s Future: Harnessing Blockchain for Economic and Social Transformation’ Agama said Blockchain technology has moved beyond being a mere buzzword; it is becoming an essential part of the global financial and economic ecosystem. Its decentralised, transparent, and secure nature has led to innovations in various sectors; ranging from finance to supply chains, healthcare, and governance.
The DG said in Africa, where there are significant issues such as financial exclusion, lack of transparency, and inefficiencies in public and private sectors, blockchain presents an opportunity to build a future where these challenges are addressed.
Blockchain is a digital ledger technology that securely records and verifies transactions across a network of computers. Each transaction is grouped into a block, and these blocks are linked together in a chronological chain. This structure ensures that once information is added to the blockchain, it cannot be altered or deleted, providing a transparent and tamper-proof record.
He stated that “as the transformative potential of blockchain is being celebrated, it is important to address the role of regulation in enabling its growth. Regulation is often viewed as a barrier to innovation, but it is, in fact, essential to building a stable and trustworthy environment for innovation to flourish.
“We have introduced several measures to ensure that these innovations are harnessed responsibly: Accelerated Regulatory Incubation Program (ARIP) and Regulatory Incubation (RI) Program: The ARIP and RI Program were designed to on-board firms operating in the digital asset space and provide a controlled environment to test new models, products, and services. These programs foster innovation while ensuring that robust consumer safeguards are in place. The recent approval-in-principle granted to two digital asset exchanges and five firms participating in these programs is a testament to our commitment to enabling innovation.”
He added that the Commission is consistently aligning with international best practices by collaborating with global regulatory bodies such as the International Organization of Securities Commissions (IOSCO), adding that this ensures that the Commission’s regulatory framework remains robust, adaptive, and aligns with global standards, enabling cross-border collaboration and fostering investor confidence.
Agama said we will explore the real world applications of Blockchain technology in African businesses and the regulatory frameworks needed to build a trustworthy Blockchain ecosystem, saying that blockchain technology offers an opportunity to transform the nation’s economy and the SEC commits to the journey with a shared vision, a spirit of collaboration, and an unwavering focus on building a prosperous and inclusive Africa.
Recently, the regulator also approved Trovotech Ltd, Wrapped CBDC Ltd, Housing Exhange.NG Ltd, Dream City Capital, and Blockvault Custodian Ltd.
The ARIP was introduced by the SEC to onboard firms that had already begun operations before the release of the Rules on Virtual Asset Service Providers in May 2022. The RI Program was designed to evaluate the business models of digital asset firms and allow them to test their products, services, and technology in a real-world market environment under the regulator’s close supervision.
During this conversation, he noted that the SEC’s mandate is twofold. He said, “Our work at the SEC is to protect investors and foster market development.”
He added that while the commission is open to innovation, businesses must meet regulatory and compliance requirements to ensure the growth of a stable and sustainable digital economy.