The Nairobi Securities Exchange has partnered with global technology company DeFi Technologies to launch the Kenya Digital Exchange (KDX).

This will enable the digitization and trading of both intangible real-world assets —like equities, debts, and exchange-traded funds — as well as tangible commodities such as gold and oil, all on the blockchain-based KDX platform.

The details

  • In a press release, DeFi Technologies announced that it worked with its exchange-traded products (ETPs) issuance subsidiary Valour and the capital markets liquidity provider SovFi to design KDX.
  • The Kenyan Digital Exchange is built on the Hedera network, to whose governing council the NSE belongs, the company announced.
  • DeFi Technologies plans to roll out the KDX in phases starting with onboarding investors, issuing primary tokens and ensuring regulatory compliance, all scheduled to be completed before next year.
  • In subsequent phases, it plans to introduce advanced trading strategies powered by artificial intelligence and secondary market trading while also ensuring the exchange is interoperable with other platforms.
  • KDX’s launch is a sequel to a memorandum of understanding previously signed between all three firms to allow the issuance and trade of Valour’s ETPs on the Nairobi Stock Exchange.
  • According to the company, the listing process of these ETPs is at an advanced stage and should be completed before the end of September.

Key quotes

  • Frank Mwiti, CEO of the Nairobi Securities Exchange, said:

“By collaborating with DeFi Technologies and SovFi to design and launch the KDX, we are laying the foundation for a dynamic digital marketplace that will unlock new investment opportunities, deepen market access, and position Kenya as a trailblazer in the tokenization and trading of real-world assets across the continent.”

Before now

  • The Nairobi Securities Exchange has been working to digitize its operations and broaden its listings to include digital assets.
  • Last year, Mariblock reported that the NSE joined the Hedera Governing Council to allow it launch tokenized securities on a blockchain.
  • This was seen primarily as a move by the otherwise traditionally run stock exchange to go digital and attract Kenya’s mostly tech-savvy youth to trade on the exchange.
  • However, several tokenization projects globally are still in experimental phases. As such, the NSE’s digitization move does not have much to look to by way of successful precedents.