Kenya’s banking sector is exploring tokenized collateral, signaling a new frontier in blockchain-based lending, transparency, and credit access.
The Kenya Bankers Association (KBA) is evaluating the use of tokenized collateral—blockchain-based representations of real-world assets—to streamline lending and enhance transparency, according to NSE CEO Frank Mwiti.
This move aligns KBA with global trends in blockchain finance, allowing banks to digitize and track assets like real estate, vehicles, or securities. The shift promises faster loan processing, lower costs, and expanded access to credit, especially for underserved populations.
The initiative follows the Nairobi Securities Exchange’s partnership with Hedera Hashgraph and DeFi Technologies to explore security token issuance.
While regulatory clarity remains a challenge, tokenized collateral could revolutionize how banks handle secured lending, enabling smart contract-powered verification, real-time tracking, and diaspora asset pledging.
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