The move follows the introduction of regulations to guide trade in digital assets by the Nigerian Securities and Exchange Commission, and the growing interest to adopt the distributed-ledger technology by businesses and policy makers across the continent including in Kenya and South Africa.

The exchange looks to deploy the blockchain technology in settlement of capital market transactions, Temi Popoola, the chief executive of Nigeria Exchange, said in an interview. “For a lot of young and upcoming Nigerians, that is the kind of technology they adopt and we want to see how we can deploy it to grow our market,” Temi said. 

The plan is unfolding in the wake of a rout in cryptocurrency markets following the collapse of the Terra blockchain in May. Bitcoin has plunged more than 50% since reaching a record high last November. 

While young Nigerians account for the largest volume of cryptocurrency transactions outside the US, according to Paxful, a Bitcoin marketplace, they have largely ignored the local bourse. Nigerians traded $185 million of Bitcoins on the platform in the first three months of the year, accounting for a quarter of transactions in the period on Paxful. 

The Nigerian bourse will partner with a technology firm and get the approval of regulators before the launch in 2023, according to Popoola. “Blockchain technology can facilitate different parts of the capital market, whether around creation of products or facilitation of the Exchange to trade financial assets,” he added.

Digitising transactions will help attract young buyers looking for diversified products as well as fast and easy access to the market, Popoola said. The bourse’s first complete electronic share offering, issued by MTN’s Nigeria unit last year, was 1.2 times oversubscribed, with 85% of the investors under 40 years.

“It’s almost impossible to think of blockchain without including cryptocurrency, so if the adoption is not in agreement with central bank’s position, there may be skepticism from investors,” Gbemisola Alonge, a tech policy analyst at Stears in Lagos, said by telephone. Besides blockchain, the listed companies should be able to deliver returns to attract the target investors, she said.

Last year, the central bank ordered commercial lenders to stop transactions or operations in cryptocurrencies, citing a threat to the financial system. Nigeria’s SEC said at the time it would seek to protect investors and make the market more transparent.

Blockchain technology is catching on across the continent. South African authorities are engaging with the fintech industry to enable the incorporation of the distributed-ledger technology in the financial markets. In Kenya, lenders are seeking approval to deploy the technology in payments to reduce the incidence of bad loans. Nigeria introduced the eNaira, a digital currency last year, in a bid to boost financial inclusion in Africa’s most populous nation where a third of population have no access to financial services.