NGX chief stated “That is the sort of technology that a bunch of teenagers and emerging Nigerians utilize, and we want to explore how we can implement it to increase our market so that we can cater to those individuals.”
The underlying technology behind cryptocurrencies is called blockchain. The new development will come at a time when politicians and companies in Africa are making more efforts to use technology to their advantage in order to make commercial transactions easier. The Securities and Exchange Commission, which is responsible for monitoring the capital markets, has also introduced a regulatory environment for trades involving digital assets. Since the Terra blockchain failed a month earlier, the markets for cryptocurrencies are witnessing a precipitous decline; the value of Bitcoin, in particular, has decreased by over 50% since it reached a peak almost eight months back.
According to Paxful, which provides a framework for trading in Bitcoin, young people in Nigeria are responsible for the largest amount of cryptocurrency transactions in the world, second only to those in the United States. However, Nigerian youngsters are not interested in equities trading. The new move is expected to be positively greeted by young investors, many of whom have recently investigated the possibility of investing in cryptocurrencies and in overseas markets as a means of avoiding the inflationary pressures that are now being felt in Nigeria. From April 2019 to April 2022, the annual rate of inflation in Nigeria increased to 16.8 percentage points, from a previous annual rate of 12.3 percentage points.
Popoola stated “The technology behind blockchain may make it easier to participate in several aspects of the capital market, such as the manufacturing of goods or the operation of an exchange for the trading of financial instruments.”
Before the roll out next year, his organization’s goal is to create a synergy with a technological firm and get approval from the relevant authorities. Because the Central Bank of Nigeria believes that allowing commercial banks to facilitate cryptocurrency trades might put the country’s whole financial system at risk, it has imposed a prohibition on doing so. According to him, the use of digitalization in commercial transactions will make it possible to recruit younger investors who have an interest in a wider range of goods and will also make it easier for these individuals to have unhindered access to financial market.