Tether and the Nairobi Securities Exchange signed an exploratory memorandum of understanding on July 28 to study tokenized securities, blockchain-based market infrastructure and digital asset education in Kenya — a move that could reshape how securities are issued, traded and settled if regulators and market participants sign off.
What the deal covers
- The MoU focuses on Hadron, Tether’s tokenization platform, and sets out to evaluate fractional access to NSE-listed instruments for local and diaspora investors, onboarding and compliance workflows aligned with Kenyan AML/KYC rules, and potential uses of USDT as a settlement layer “where permitted.”
- The agreement also includes training and workshops for NSE-listed brokers and retail investors, and a review of instant and atomic settlement models that Tether says could simplify the exchange’s multi-stage settlement process.
Important caveats — this is exploratory
- The MoU does not approve any specific tokenized security, launch a trading platform, or commit the NSE to settle trades in USDT. No pilot date, budget or binding implementation timeline was announced.
- Hadron is described by Tether as software that provides issuance, transfer and compliance tools — not the issuer or guarantor of tokens. That means legal and operational responsibilities would still rest with the NSE, issuers, custodians and licensed intermediaries before any product reaches investors.
- Tether and the NSE have not identified which securities might be tokenized, which blockchain would be used, or who would custody the underlying assets. They also haven’t explained how blockchain records would integrate with Kenya’s existing central depository and ownership systems.
Regulatory backdrop matters
- Kenya’s Virtual Asset Service Providers (VASP) Act took effect Nov. 4, 2025. It places tokenization and token issuance platforms under the Capital Markets Authority (CMA), while the Central Bank of Kenya oversees stablecoin issuance. The law requires licensing, AML controls, tech safeguards and approval for covered virtual asset offerings.
- Draft implementing regulations were published by the National Treasury in March 2026 and remain drafts with the CMA. The Act explicitly allows rules covering tokenized assets, real-world asset tokenization and stablecoins — meaning any NSE pilot will hinge on how regulators classify and authorize these activities.
- The MoU’s phrasing that USDT could be used “where permitted” is significant: it does not imply regulatory approval for using USDT as a securities settlement instrument in Kenya. No CMA or central bank signoff accompanied the announcement.
Context and scale
- This is not the NSE’s first foray into blockchain. In 2025 the exchange joined DeFi Technologies, Valour and SovFi to develop the Kenya Digital Exchange for tokenized equities, debt, funds and commodities.
- Tether introduced Hadron in 2024 to expand beyond stablecoins; the platform supports tokenization of corporate equity, bonds, commodities and sovereign debt with configurable compliance controls.
- To provide market context: RWA.xyz tracked about $36.9 billion of tokenized real-world assets (excluding stablecoins) as of July 27, and USDT’s market capitalization was near $184 billion on July 29. Those figures illustrate the broader market’s size but don’t prove demand for tokenized Kenyan securities.
Next steps and outstanding questions
- Likely next steps include selecting pilot assets, defining ownership and custody arrangements, designing investor disclosures, and securing regulatory clearance. Other unresolved items are settlement finality, redemption rights, data protection, taxation and treatment of local vs. diaspora investors.
- The MoU does not set deadlines for these steps. Until regulators approve structures and technical specifications are published, the agreement should be seen as a framework to study tokenization and settlement — not a live market launch.
NSE CEO Frank Mwiti framed the partnership as aligning with the exchange’s 2025–2029 strategy to prioritize technology, market participation and investor access, stressing that the work is exploratory rather than a confirmed rollout. For participants and observers, the coming months will be about regulatory clarity and concrete pilot decisions that could determine whether tokenized securities move from concept to Kenyan reality.
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