Kenya to introduce digital asset ETPs

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Kenyan investors will soon access digital asset exchange-traded products (ETPs) on the country’s main equities exchange.

DeFi Technologies, a Canada-based company, has struck a new partnership with the Nairobi Stock Exchange (NSE) to facilitate the issuance and trading of digital asset ETPs in the East African country.

NSE signed the Memorandum of Understanding (MoU) with Valour, a subsidiary of DeFi Technologies, this week. Established in 2019, Valour offers 33 ETPs in Europe, including in Börse Frankfurt, Euronext Paris, Euronext Amsterdam, and the Nordic Growth Market.

DeFi Technologies' Subsidiary Valour Inc. (@ValourFunds) Announces Landmark MOU with Nairobi Securities Exchange and SovFi to Develop and Launch Valour ETPs in Africa https://t.co/MW4GrBTOcx $DEFTF $DEFI.NE

— DeFi Technologies (@DeFiTechGlobal) August 6, 2024

The MoU, which also includes market liquidity provider SovFi, allows Valour to deploy its ETPs on the Kenyan stock exchange, develop market infrastructure for digital assets, and eventually expand to tokenizing real-world assets.

Valour believes the new ETPs will enable it to venture into the African market and expand its global footprint while also increasing market liquidity for its products and diversifying investment opportunities.

“This MOU marks a significant milestone in Valour’s mission to expand access to digital asset investment products globally,” commented Olivier Roussy Newton, the CEO of its parent company, DeFi Technologies.

NSE agreed to permit Valour to offer its new ETPs under a passporting agreement. In Europe, passporting allows a company licensed and regulated in one member of the European Economic Area to serve customers from any other member of the EEA. However, passporting only applies within the EEA—companies serving third countries beyond the region can apply for equivalence, a partial and conditional regulatory status.

“By leveraging our expertise in issuing innovative ETPs and facilitating the passporting of our financial instruments to the NSE, we aim to provide investors with secure and regulated exposure to the dynamic world of digital assets,” Newton added.

For the NSE, the new partnership allows one of Africa’s premier stock trading platforms to venture into digital assets without having to spend large sums on infrastructure development.

Kenya is one of Africa’s largest digital asset markets and one of the world’s largest P2P markets. According to the UN, over four million Kenyans own digital assets; other studies claim that Kenyan investors hold over $1.5 billion in digital assets, equating to over 1.2% of the country’s GDP.

“By facilitating the creation, issuance, and trading of digital asset ETPs, we are opening new avenues for both local and international investors. This move will not only diversify our market but also contribute to the growth of Kenya’s economy,” commented Frank Mwiti, NSE’s CEO.

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