The Nigerian stock exchange plans to utilize blockchain for trade settlement. However, at present, young investors are more willing toward the crypto market, and exchanges are not receiving a lot of users.
So, Nigerian Exchange Ltd, the largest stock exchange in Nigeria, plans to roll out a blockchain trading platform. Almost every country is considering blockchain as it could allow for same-day settlement instead of (t+1 or t+2) days settlement.
Nigeria’s stock exchange to employ blockchain technology
The CEO of Nigerian Exchange Ltd., Temi Popoola, said that blockchain is the kind of technology many young Nigerians want to adopt. Therefore, they are looking forward to using it and growing their market.
Many young citizens of Nigeria are inclined to make crypto transactions on international platforms. Hence, the in-house companies do not see huge volumes.
One such platform is the Nigerian Bourse – a Bitcoin platform where users have traded $185 million in Bitcoin in Q1 2022. The Nigerian Exchange Ltd will collaborate with Bourse and get regulatory approval before launching the blockchain-integrated platform in 2023. They believe blockchain use will evolve into an effective way to trade financial assets and bring easy market access.
However, all of this is only possible if the authorities allow it. So unless the central bank gives regulatory approval to utilize blockchain, the exchange wouldn’t be able to go forward with the launch. Also, it will be difficult because Nigeria’s central bank has always been a prominent skeptic of cryptocurrencies. They even prohibited banks from dealing with crypto as they risk the nation’s financial stability.
What are the advantages of using blockchain to settle trades?
Blockchain can be utilized to automate and decentralize stock markets for a far more efficient experience. It will also help customers save much commission by speeding up the transaction settlement process.
The use of blockchain can also eliminate the need for a 3rd part regulator to a significant extent. Again, the rules can be integrated into smart contracts, which can be applied automatically.
What are your views on the Nigerian stock exchange programs using blockchain? And do you believe they will get regulatory approval from the Central bank? Let us know in the comment box below. Also, if you found our content illuminating, do like and share it with your friends.