Tokenization and Initial Coin Offerings on Blockchain as Drivers of Market Sustainability in the Nigerian Capital Market
DOI:
https://doi.org/10.53819/81018102t5430Abstract
This study evaluated the impact of tokenization and initial coin offerings (ICOs) on market sustainability in the Nigerian Capital Market. Despite its strategic importance, the market remains constrained by inefficiencies, weak transparency and limited investor participation. Drawing on Transaction Cost Theory and Information Asymmetry Theory, the study adopted a quantitative design, using primary data from 364 stakeholders. Structural Equation Modeling revealed that tokenization and ICOs exert a statistically significant positive effect on market sustainability (β = 0.21, p = 0.002), thereby enhancing liquidity, inclusivity and operational efficiency of the capital market. Reliability and validity tests confirm the robustness of measurement instruments. The model fit index (SRMR = 0.064) confirms acceptable model fit, while the structural model explains approximately 67% of the variance in market sustainability. Although the study found that regulatory uncertainty constrained optimal adoption, the SEM results indicate that tokenization and ICOs could significantly strengthen market sustainability when supported by coherent regulatory frameworks. The study therefore recommended that regulators should make an effort to harmonize the regulatory framework, institute investor protection mechanisms and develop the required infrastructure to facilitate the effective integration of ICOs into the Nigerian Capital Market.
Keywords: Tokenization, Initial Coin Offerings, Market Sustainability, Blockchain, Nigerian Capital Market.
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