The Director-General of the Securities Exchange Commission (SEC), Emonotimi Agama, has revealed that 50 cryptocurrency exchanges in the country have applied for operating licenses following the government’s change in stance on digital assets.
The Director-General disclosed this during a fireside chat at the Blockchain Conference in Lagos on Wednesday. In August, the SEC announced that it had given in-principle approval to two digital asset exchanges to commence operations under the Accelerated Regulatory Incubation Programme (ARIP). Also, five companies have been approved to test their models and technologies as part of the Regulatory Incubation Programme.
The approved companies include Busha Digital Limited, Quidax Technologies Limited, Trovotech Ltd, Wrapped CBDC Ltd, and Housing Exchange.NG Ltd, Dream City Capital, and Blockvault Custodian Ltd. The ARIP was created by the SEC to accommodate companies that had already started operations before the rules on virtual asset providers were released in May 2022.
Meanwhile, the RI program is designed to evaluate digital asset companies’ business models and allow them to test their products, services, and technologies in a real market environment under strict regulators’ supervision.
At the time, the SEC said additional license applications would be reviewed and in-principle approval would be granted if the requirements were met.
According to the Secretary-General on Wednesday, the regulator received 50 applications and accepted seven companies into the program. “Our work at the SEC is to protect investors and foster market development,” he said, noting that the commission is open to innovation, while companies must meet regulatory and compliance requirements to support stable growth and ensure a sustainable digital economy.
He explained that the government is open to cryptocurrencies and blockchain because it has seen the country’s youth adopt the technology. However, he noted that the pace of adoption of digital assets may vary by sector, but will eventually happen.
“For Innovators, we encourage you to seize the opportunity to develop blockchain solutions tailored to Africa’s unique needs. Focus on solving real-world problems, such as financial exclusion, inefficient supply chains, and lack of transparency in governance,” he added.
In another fireside chat, Quidax CEO Buchi Okoro said regulation will help govern operators’ activities in the sector and protect investors. He said that while many of the scams perpetrated using cryptocurrencies are alarming, they pale in comparison to those perpetrated through traditional channels.
He stressed that the problem with cryptocurrencies is that criminals are quick to adopt them. “Criminals typically adopt new technology faster than everyone else,” he said. Okoro explained that many of these issues will go away as more reputable companies enter the market.
Francis Ogbuka, vice president of sales and Development, Zone, said the recent licensing of cryptocurrency exchanges will lead to further growth in the industry as many players move their assets to regulated entities that provide a level of security. Nigeria is one of the world’s largest peer-to-peer (P2P) cryptocurrency markets.
According to Chainalysis, a global blockchain platform, cryptocurrency trading in the country totaled $56.7 billion between July 2022 and June 2023. All industry experts who attended Business Day’s blockchain event noted that regulation of the sector would benefit the country.
The SEC has led efforts to build a regulatory framework for the cryptocurrency industry, especially since the Central Bank of Nigeria (CBN) lifted the ban in December 2023 and gave it regulatory oversight.
