The Securities and Exchange Commission (SEC), has explained that the recent approval-in-principle given to two cryptocurrency exchanges will enhance youth engagement in Nigeria’s capital market.
Emomotimi Agama, the SEC Director-General, in a statement on Thursday, explained that the approval given to Busha Digital Limited and Quidax Technologies Limited aligned with President Bola Tinubu’s commitment to engaging the country’s youth population.
“A lot of young Nigerians are involved in digital assets. It is essential to include them in the capital market rather than exclude them. We are ensuring that proper regulations are in place to protect investors and encourage participation,” he said.
According to Agama, SEC’s move was part of its broader strategy to manage risks posed by digital assets while developing the capital market, noting that the initiative was driven by the need to regulate the sector without stifling innovation.
Agama explained that the approval was still at an incubation stage, with the SEC carefully studying the platforms to ensure they adhere to regulatory guidelines.
He assured the public that the SEC’s goal was to foster innovation while safeguarding investors from potential risks posed by those exchanges.
The SEC boss noted that the introduction of cryptocurrency exchanges into the regulated environment would open up new opportunities for younger Nigerians who had shown increasing interest in digital assets.
He added that rather than shutting the door on those innovations, the commission was working to include them within the broader capital market structure, ensuring a balance between innovation and investor protection.
“The idea behind the Regulatory Incubation Programme is to observe and evaluate these companies in real-time. By doing so, we can understand the risks they pose, not only to investors but also to the broader financial system. It is important that they meet the necessary regulatory guidelines before full approval is granted,” he asserted.
Agama also stated that the SEC’s decision to approve those exchanges in principle comes after careful consideration of the potential risks and rewards.
“We don’t want to stifle innovation. However, we must regulate these platforms to ensure they contribute positively to our economy without causing chaos. The SEC’s primary responsibility is to protect investors and promote market development.
“In addition to encouraging youth participation, the SEC’s approval of digital exchanges is expected to build greater confidence in Nigeria’s capital market, which has struggled to attract younger investors. The regulatory incubation will allow the SEC to guide these exchanges and ensure they operate in line with international best practices,” he noted.
As part of the effort to manage risks, the SEC has also introduced a “sound box” initiative, which provides the commission with a platform to better understand the fintech ecosystem.
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