Tether, the issuer of the $184 billion stablecoin, has officially expanded into East African capital markets. The company signed a memorandum of understanding with Kenya’s Nairobi Securities Exchange (NSE), marking a strategic move to bridge crypto market liquidity with traditional stock exchange operations.
The scope of this agreement extends beyond digital asset education programs for local market participants. Tether and the Nairobi exchange agreed to collaborate on exploring blockchain-based market infrastructure, with a primary focus on facilitating the issuance and tokenization of real-world assets (RWAs).
Bringing Hadron to the Nairobi Exchange
To facilitate these plans, Tether is promoting the adoption of its proprietary tokenization platform, Hadron. Under this agreement, both parties will explore Hadron’s potential as a core engine for both the issuance and trading of tokenized securities.
Through this model, conventional investment instruments traded on the Kenyan exchange could eventually be issued as digital tokens on a blockchain. This on-chain format provides real-time ledger efficiency that can significantly shorten intermediary chains in traditional exchange settlement systems.
USDT as a Settlement Layer
Issuing tokenized securities is just one aspect of the partnership. The potentially most impactful element is the plan to utilize USDT as a direct digital transaction settlement layer within the Nairobi exchange ecosystem.
Integrating the world’s largest stablecoin into core exchange infrastructure would open new settlement routes for investors. Naturally, the implementation of this settlement layer must be designed to fully comply with applicable financial regulations in Kenya. If realized, stock and bond transaction settlements would no longer have to rely entirely on sluggish banking rails.
Vying for a Share in the $36.8 Billion RWA Market
Tether’s move into Kenya aligns with the surging capital inflows entering the real-world asset sector. Recent tracking data from RWA.xyz shows that the on-chain RWA sector - excluding stablecoin circulation - is now valued at approximately $36.8 billion.
If the global stablecoin ecosystem reaching $298 billion is factored in - given that some market participants view on-chain fiat as the most fundamental form of RWA - the market’s liquidity size surges dramatically. It is this massive liquidity that Tether aims to connect to Nairobi’s traditional exchange.
Overhauling a nation’s stock exchange infrastructure into a blockchain-based system is certainly not an overnight task. However, for emerging markets like East Africa, the door to seamless integration between digital assets and conventional instruments has officially swung open.
Reported by Cointelegraph.
Read also: What Is DeFi (Decentralized Finance)?
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
