Emonotimi Agama, director-general of the Securities Exchange Commission (SEC), has disclosed that 50 cryptocurrency exchanges have applied for operational licenses in the country following the government’s change in stance on digital assets.

The DG disclosed this during a fireside chat at the BusinessDay Blockchain Conference in Lagos on Wednesday.

In August, the SEC announced that it had granted approval in principle to two Digital Asset Exchanges to begin operations under its Accelerated Regulatory Incubation Program (ARIP).

Five firms were also admitted to test their models and technology under its Regulatory Incubation Program.

The approved firms include: Busha Digital Limited, Quidax Technologies Limited, Trovotech Ltd, Wrapped CBDC Ltd, HousingExhange.NG Ltd, Dream City Capital, and Blockvault Custodian Ltd.

The ARIP was introduced by the SEC to onboard firms that had already begun operations before the release of the Rules on Virtual Asset Service Providers in May 2022.

The RI Program, on the other hand, was designed to evaluate the business models of digital asset firms and allow them to test their products, services, and technology in a real-world market environment under the regulator’s close supervision.

At the time, the SEC had noted that additional license applications were being assessed and that approvals-in-principle would be granted on a case-by-case basis once the requirements were met.

According to the DG on Wednesday, the regulator received 50 applications and has accepted seven firms into its programmes.

“Our work at the SEC is to protect investors and foster market development,” he said, noting that while the commission is open to innovation, businesses must meet regulatory and compliance requirements to ensure the growth of a stable and sustainable digital economy.

He explained that the government is receptive to crypto and blockchain because it has seen the country’s youths adopt the technology.

He, however, noted that the pace of acceptance of digital assets may vary across different sectors but will eventually happen.

“For Innovators, we encourage you to seize the opportunity to develop blockchain solutions tailored to Africa’s unique needs. Focus on solving real-world problems, such as financial exclusion, inefficient supply chains, and lack of transparency in governance,” he added.

During another fireside chat, Buchi Okoro, Quidax’s chief executive officer, noted that regulation helps check operators’ activity in the space and protect investors.

He said that much of the fraud carried out with crypto, while alarming, pales in comparison with those done through traditional channels.

He highlighted that the issue with crypto was that criminals quickly adopted it. “Criminals typically adopt new technology faster than everyone else,” he said.

Okoro stated that much of this will dissipate as more genuine entities embrace the market.

According to Francis Ogbuka, vice president of sales and Development, Zone, the recent licensing of crypto exchanges will lead to more growth in the sector as many players will move their assets to regulated entities that offer them a level of safety.

Nigeria is one of the largest peer-to-peer (P2P) crypto markets globally. According to Chainalysis, a global blockchain platform, crypto transactions in the country totalled $56.7 billion between July 2022 and June 2023.

SEC has been leading efforts to establish a regulatory framework for the crypto industry, particularly after the Central Bank of Nigeria (CBN) lifted its ban in December 2023 and handed regulatory oversight to it.

US Bitcoin exchange-traded funds have posted their longest run of daily net outflows since listing at the start of the year, part of a wider retreat from riskier assets in a challenging period for global markets.

Investors pulled close to $1.2 billion in total from the group of 12 ETFs over the eight days through Sept. 6, data compiled by Bloomberg show.

The drop comes amid a rocky period for shares and commodities on economic growth worries.

Mixed US jobs data and deflationary pressure in China are both taking a toll on traders. The uncertainty is buffeting the cryptocurrency market, whose gyrations have become more closely tied to moves in stocks based on a rising short-term correlation between the two.

Bitcoin has struggled in September, posting a loss of approximately 7%. But the largest digital asset eked out modest gains over the weekend and climbed roughly 1% to $54,870 as of 1pm on Monday in Singapore.

“The small relief rally seems to be driven in part by some prominent influencers closing out their shorts,” said Sean McNulty, director of trading at liquidity provider Arbelos Markets.

He cited as an example a recent social media post from Arthur Hayes, co-founder of the BitMEX trading platform.

An improved showing by Donald Trump, the pro-crypto Republican nominee for the US presidential election, in polls and prediction markets may also be playing a role, McNulty said.

He reported greater demand for options hedges in case Tuesday’s debate between Trump and Democratic nominee Vice President Kamala Harris stirs volatility. Harris has yet to detail her stance on crypto.

The US Bitcoin ETFs investing directly in the original cryptocurrency debuted in January with much fanfare. Unexpectedly strong demand for the funds helped to drive the token to a record high of $73,798 in March.

The inflows subsequently moderated and Bitcoin’s year-to-date rally has cooled to about 30%.

The token will likely trade in its recent $53,000 to $57,000 range until the US releases consumer-price data on Wednesday, said Caroline Mauron, co-founder of Orbit Markets, a provider of liquidity for trading in digital-asset derivatives.

The inflation numbers may shape expectations for the pace of anticipated monetary easing by the Federal Reserve in the US.

The Securities and Exchange Commission (SEC) has granted approval in principle to two prominent digital asset exchanges, Busha Digital Limited and Quidax Technologies Limited.

These approvals, part of the SEC’s Accelerated Regulatory Incubation Programme (ARIP), represent the beginning of a new chapter for crypto trading in Nigeria.

This development was announced by the SEC in a statement on Thursday, which highlighted the importance of this move in the evolving landscape of digital assets and blockchain technology in the country.

Both Busha and Quidax, well-established players in the Nigerian crypto space, will now be able to operate under this regulatory framework, fostering more secure and transparent trading platforms for the nation’s growing number of crypto enthusiasts.

Busha Digital, known for its accessible digital exchange platform, allows individuals and businesses to buy, sell, store, and invest in cryptocurrencies using fiat currency.

Its services are aimed at providing easy access to basic digital asset investment for users across Nigeria and other developing economies.

The platform, available through mobile and web applications, has gained popularity for its user-friendly interface and commitment to making crypto investment seamless and safe for Nigerians.

Quidax Technologies, another major player, operates a cryptocurrency trading platform leveraging blockchain technology.

The exchange facilitates trading in a variety of cryptocurrencies and provides users with a digital wallet for secure transactions.

Quidax’s platform is both mobile and web-enabled, offering a wide range of crypto tokens for trading, making it a key player in the adoption of digital currencies in Nigeria.

According to the SEC, the current ARIP cohort includes two digital asset exchanges, four digital asset offering platforms, and one digital asset custodian.

This programme was designed to assess the business models of digital asset firms and allow them to test their innovative products, services, and technologies in a controlled environment.

The outcome will inform future policies in the digital asset space.

Speaking on the significance of the ARIP programme, the SEC explained that the approvals are a precursor to full registration, ensuring that appropriate safeguards are in place to protect investors and promote transparency in the cryptocurrency sector.

“The RI (Regulatory Incubation) Programme was created to assess the business models of digital assets firms and test innovative products, services, and technology in a real-time market environment under close supervision by the SEC,” the commission stated.

The approval of Busha and Quidax is seen as a major step forward in bringing legitimacy to Nigeria’s burgeoning cryptocurrency market, which has faced regulatory uncertainty in recent years. These digital asset exchanges will now operate under SEC’s guidance, ensuring that users of the platforms can trade with more confidence and security.

The SEC also took the opportunity to remind the public to only engage with approved digital platforms and urged caution when dealing with unregulated crypto exchanges.

“The SEC uses this medium to reiterate that only approved digital exchanges and platforms are legally authorized to carry out the business of crypto trading in any form in Nigeria,” the commission advised.

This approval comes at a time when cryptocurrencies are gaining traction globally, and Nigeria has become one of the leading markets for crypto adoption in Africa.

With Busha Digital and Quidax now moving forward under SEC oversight, the future of cryptocurrency trading in Nigeria looks set for greater growth, innovation, and regulation.