SEC grants NASD approval to launch digital securities platform

THE Nigerian Securities and Exchange Commission (SEC) has granted approval to NASD PLC to launch its Digital Securities Platform (N-DSP), powered by Blockstation, under the Regulatory Incubation (RI) Programme.

This milestone, which follows the lift of ban on trading on digital assets by the Central Bank of Nigeria (CBN), signifies a major stride towards  fostering a new age of innovation that enhances transparency and deepens trust and inclusion in the Nigerian capital markets.

NASD, in collaboration with Blockstation Incorporation, had engaged with SEC to shape a regulatory framework for crypto and digital assets. The development of regulations and the subsequent approval for the launch of the NASD Digital Securities Platform (N-DSP) mark a significant outcome of this collaborative initiative.

“Our objective is to empower millions of young investors with access to promising digital assets, ensuring they can make purchases with confidence in a completely compliant and secure investment environment. Nigeria currently ranks second globally,  for blockchain wallets and our exchange is poised to supporting  high-quality assets, thriving on the blockchain.” explained Eguarekhide Longe, Managing Director, NASD PLC.

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 diaspora, with $20 billion in annual remittances, can have a promising window to invest their money back home.

The tokenisation of entertainment assets, such as publishing rights, can further empower and monetise the world’s largest film content creators, For instance, as Nollywood, currently undercapitalised, new markets like tokenised real estate and mortgage-backed securities (MBS) can leverage tokenisation to address such challenges, including the 28 million housing deficit, thereby creating a substantial market opportunity.

“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 and development,” Jai Waterman, CEO, Blockstation, said.

NASD OTC Securities Exchange (NASD) is a Self-Regulatory Organisation,  licensed by the SEC to operate an Over the Counter (OTC) securities exchange in Nigeria for Unlisted Public Securities.

Blockstation, as a technology partner, has provided a robust enterprise blockchain-driven platform, originating and popularizing the importance of regulated tokenized IPOs, generally called Security Token Offerings (STO’s). The N-DSP is set to transform the way of issuing, trading, and settlement of digital securities, democratizing, access to capital markets and leveraging blockchain technology to enhance accessibility while minimizing costs.

The operations of the N-DSP during the RI Program will be regulated by SEC and participating institutions, such as custodians, brokers and issuing houses, will play essential roles during this phase. The focus has now shifted  to market sensitization and public education before going Live. It will be facilitated by a consortium of partners, namely NASD PLC, Blockstation, Sophus Consulting and TK Tech Africa. This sandbox will involve a limited number of qualified issuers, marking a strategic approach for enhanced controlled and effective implementation.