The Securities and Exchange Commission (SEC) of Nigeria has granted “Approval-in-Principle” to two Digital Asset Exchanges, enabling them to commence operations under the Accelerated Regulatory Incubation Programme (ARIP).
The announcement, made on Thursday, August 29, 2024 marks a significant step towards expanding the digital assets market in Nigeria while ensuring the protection of investors.
According to a statement from the commission, the move aims to deepen the capital market and foster innovation in the financial sector. “The referenced Approvals-in-Principle are a precursor to the grant of full registration by the SEC and are meant to ensure that appropriate protection and transparency are in place concerning each product or service,” the statement read.
Additionally, five firms have been admitted to test their business models and technology under the SEC’s Regulatory Incubation (RI) Programme, which allows digital asset firms to experiment with innovative products and services in a real-time market environment under the close supervision of the SEC.
The ARIP was introduced to onboard firms that had begun operations prior to the release of the Rules on Virtual Asset Service Providers in May 2022. Meanwhile, the RI Programme is designed to evaluate business models and test new technologies, such as distributed ledger technology (DLT) used in creating and trading crypto assets.
“Tests would be conducted on a short-term and small-scale basis, and the SEC would continue to work with the participating firms to agree on testing parameters as well as robust consumer safeguards,” the SEC noted.
The SEC disclosed that the firms under the ARIP include Busha Digital Limited, Quidax Technologies Limited, Trovotech Ltd, Wrapped CBDC Ltd, HousingExchange Ltd, Dream City Capital, and Blockvault Custodian Digital Asset Limited. However, it clarified that these are not the only entities in the program, as other applications are still being assessed for possible inclusion.
The commission’s actions reflect an ongoing commitment to developing appropriate policies that will support the growth of digital assets while ensuring investor protection and market stability.
