In what might be the end for stockbroking firms in Nigeria and Africa at large, Veritaseum, a United States-based blockchain technology firm has hinted that the introduction of blockchain technology into Africa’s capital market will eliminate the services of middlemen and thereby reducing transaction time.
Middleton – who was also a panelist during the ASEA Conference’s Pathways to Inclusive Growth in Africa: Digital Finance, Financial Literacy, Inclusion and the Democratisation of wealth Panel discussion – said if stockbrokers across Africa don’t diversify, they might be phased out as a result of this disruption.
“I am looking at signing agreements with several exchanges and I feel we are very close, I don’t want to reveal other private information and I expect them signed before I go back to New York.” – Middleton
The game changer
By design, a blockchain is resistant to modification of the data. It is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.
For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires a consensus of the network majority.
If the Nigerian Stock Exchange (NSE) eventually introduces this technology into its trading processes, it will eliminate stockbrokers as middlemen, thereby leaving public and retail investors to directly buy and sell stocks during trading sessions.
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