Nigeria Crypto exchange Luno has introduced tokenized global stocks, the first Africa-based exchange to offer local investors direct exposure to major international firms such as Apple, Tesla, Nvidia, and Microsoft, all of which trade in Naira, and this has broken traditional barriers that have previously hindered African involvement in international capital markets.
Breaking obstacles to world investment
Nigeria Crypto platform Luno also introduced tokenized international stock in Nigeria, thereby becoming the first exchange founded in Africa to provide local investors with direct access to some of the world’s most famous companies, such as Apple, Tesla, Nvidia, and Microsoft, in Naira, as Tech Labari notes. This is a pioneering undertaking that tackles the gap that exists between the Nigerian capital markets on the participation front.
Only less than 5% of adults in Nigeria are members of the capital market, although the financial inclusion rate is 74%. Entry barriers, FX shortages, and convoluted offshore arrangements have long served to deny most Nigerians the opportunity to diversify their portfolios into global investments. Nigerian investors can now invest in 60 international stocks and ETFs on the platform, after its launch in July in South Africa. Luno recorded 10,000+ investors within the first month of its launch.
Fractional ownership allows for a cheap investment
The tokenized shares are secured by underlying stocks, which are held by partners such as the xStocks of Kraken and Backed Finance; hence, the security and regulatory requirements are met. The site offers fractional ownership, which means that it allows investors to invest any amount, as opposed to demanding full shareholdings.
Luno Nigeria CEO Ayotunde Alabi said: “Technology can now help us demolish these walls, which previously made global markets a closed club. It features immediate payment, and there is no delay in getting funds, 24/5 trading that is to be extended to 24/,7 and smooth management of both crypto and stocks on a single platform.
This is a follow-up to the previous launch of tokenised blue-chip US stocks by Luno to South Africans, wherein the company became a global leader in tokenised stocks, Finextra says. Although this is not the first time a major international exchange has started such an offering, Luno was the first to target African markets in such a manner.
Handling the emerging investment challenges in the market
Luno is solving the problems of investors in emerging markets, whereby the various layers of fees, waiting time, and process complexity often restrict conventional forms of investment. Luno eliminates these obstacles without sacrificing the level of security or regulation by providing tokenised stocks.
Luno allows customers to purchase tokenised stocks in their local currency without the need to exchange currency or incur foreign exchange charges. Rather than paying nearly R4 000 to purchase an Apple share in South Africa, say, investors can purchase only a fraction and, therefore, global investment is affordable to everyone.
Technology transforms the accessibility of investments
The tokenised assets are digital representations of classic shares and enable investors to purchase and sell shares of companies via blockchain technology. This is a paradigm change in access to investment in Africa, where historical barriers have restricted access.
This marks a radical change in the way we think of investing, as explained by de Wit. It is not merely digitising past processes, as we are reimagining what you can do better when you put better technology and investor requirements together.
The introduction of tokenized global stocks by Luno in Nigeria is a breakthrough in the democratization of access to international markets by African investors. The platform is empowering millions of Nigerians to access global wealth creation opportunities that were previously only accessible to institutional investors through the removal of old barriers such as foreign exchange complications and large minimum investments.