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Nigeria has taken a major step towards modernising its capital markets by approving the trading of tokenised shares and bonds on the NASD OTC Securities Exchange. The Securities and Exchange Commission (SEC) confirmed the approval this week, marking the country’s first formal entry into digital securities and blockchain-based market infrastructure.

The move places Nigeria among the leading African jurisdictions experimenting with asset tokenisation, a trend gaining momentum globally as regulators seek to expand market access, reduce settlement times, and deepen financial inclusion.

NASD said it will launch Nigeria’s first public offering of digital securities in early September. The offering will enable small and medium-sized enterprises (SMEs) to raise capital via tokenised instruments rather than traditional share certificates.

The exchange will represent securities as digital tokens recorded on a blockchain, replacing the conventional shareholder registry maintained by registrars. The entire lifecycle of the securities, from issuance through trading, clearing, and settlement, will run on the same blockchain infrastructure provided by Canadian fintech firm Blockstation, which has implemented similar systems in Jamaica and Barbados.

NASD’s Acting CEO, Chinwendu Ekeh, said the platform is primarily designed for Nigerian SMEs, offering “a faster, lower-cost and credible pathway” to market financing. Licensed brokers will continue to execute trades under SEC supervision.

Tokenisation offers two major advantages. First, it enables fractional ownership of securities. This allows investors to buy smaller portions of shares or bonds, lowering entry barriers and expanding participation.

Second, it enables near-instant settlement. Ownership transfers occur almost immediately, compared with the multi-day settlement cycle in traditional markets.

These features align with Nigeria’s broader digital finance strategy, which has accelerated since the Investments and Securities Act (ISA) 2025 was passed. The Act strengthened the SEC’s authority over virtual assets and clarified the regulatory perimeter for digital instruments that qualify as securities.

Last month, President Bola Ahmed Tinubu also established a Virtual Assets Council, chaired by the Central Bank of Nigeria (CBN), to coordinate oversight among financial regulators – a move widely interpreted as an effort to harmonise Nigeria’s fragmented digital-asset rules.

Nigeria’s SME sector faces chronic funding constraints. According to a May 2025 Stears study, only about 4% of Nigeria’s estimated 40 million MSMEs have access to formal bank credit. Tokenised securities could offer an alternative route to capital, particularly for businesses too small or too early-stage for traditional listings.

NASD, which serves companies not listed on the Nigerian Exchange (NGX), has grown rapidly in recent years. Its market capitalisation more than doubled in 2025, rising to ₦2.12 trillion (about $1.56 billion) from ₦1.03 trillion the previous year. As of May, the exchange listed 46 securities.

Nigeria is not alone in exploring tokenised markets. The Nairobi Securities Exchange (NSE) signed an MoU with stablecoin issuer Tether in July to pilot tokenisation and instant-settlement technologies. The West African Economic and Monetary Union (WAEMU) has yet to adopt a regulatory framework, but the Central Bank of West African States (BCEAO) convened regulators, bankers, and academics in Dakar in May to examine tokenisation models. South Africa’s Financial Sector Conduct Authority (FSCA) has also been reviewing tokenised-asset frameworks as part of its broader crypto-asset regulatory agenda.

These developments indicate a continental shift towards digital market infrastructure, driven by the need to expand access to investment and to modernise settlement systems.

The NASD has gone live with its NASD Digital Securities Platform (N-DSP) and has scheduled its inaugural public digital securities offering for early September. Ekeh described the initiative as “the beginning of a new era of capital formation”, signalling the exchange’s ambition to position Nigeria as a regional leader in digital capital markets.

With SEC approval now secured, Nigeria’s capital market ecosystem, comprising regulators, brokers, issuers, and investors, will begin to navigate the practical implications of tokenised securities. If successful, the initiative could deepen market participation, improve liquidity, and strengthen Nigeria’s position in Africa’s fast-evolving digital finance landscape.