We approved crypto exchanges to encourage Nigerian youths’ participation in capital market – SEC  

The Securities and Exchange Commission (SEC) recently granted approval in principle to two cryptocurrency exchanges to encourage Nigerian youth participation in the capital markets. This was revealed by SEC Director General, Dr. Emomotimi Agama, in a statement issued on Wednesday.

Agama explained that this decision was driven by the need to create a more inclusive financial ecosystem, tapping into the growing interest in digital assets among Nigeria’s younger generation. This initiative is also in line with President Bola Tinubu’s vision to engage youth more actively in the financial markets.

In addition to fostering youth participation, the SEC’s decision was influenced by global trends. Agama stressed the importance of staying responsive to developments in digital finance, stating, “It is crucial that we respond to global trends in digital finance. SEC is committed to ensuring that Nigeria remains competitive and innovative in the global financial markets.” He added that the SEC is developing the necessary talent and infrastructure to manage both the challenges and opportunities these new asset classes present.

Agama highlighted that many young Nigerians are already heavily involved in cryptocurrency trading, and rather than excluding them, the SEC intends to integrate them into the formal capital markets. He emphasized that the SEC is working to ensure robust regulations to protect investors while developing the market, aligning with President Tinubu’s vision for youth inclusion.

However, Agama noted that the SEC is taking a cautious approach to regulation, ensuring that these crypto exchanges do not present significant risks to the national economy or investors. The commission’s oversight of digital asset exchanges stems from its Virtual Assets Service Providers Regulation, developed to understand the unique nature of cryptocurrency exchanges and the broader digital financial ecosystem.

The approval-in-principle was granted to Busha Digital and Quidax Technologies as part of a controlled regulatory experiment. Agama explained that these companies had passed the SEC’s stringent regulatory guidelines and are now part of a regulatory incubation process. This program allows the SEC to closely monitor their activities, assess potential risks, and ensure they operate within a framework that protects both the economy and individual investors.

The regulatory incubation program also serves as a way for the SEC to study these exchanges, understand the risks they may pose, and offer guidance to ensure smooth and ethical operations. Agama added, “We are committed to making sure these platforms operate under regulations comparable to those in other jurisdictions.”

Last Thursday, Nigeria’s SEC announced the approval-in-principle for Quidax and Busha under its Accelerated Regulatory Incubation Program (ARIP), giving them the status of legally recognized crypto trading platforms in the country. Along with these two exchanges, four other companies were admitted to test their models under the Regulatory Incubation (RI) Program: Trovotech Ltd, Wrapped CBDC Ltd, Dream City Capital, and HousingExhange.NG Ltd.

The SEC clarified that these firms are not the only entities applying under the ARIP and RI Programs, noting that other applications are under review and will be granted approval in principle once all requirements are met.