Tether Invests in Kotani Pay to Enhance African Web3 Payment Infrastructure

Executive Summary

On October 21, 2025, Tether, a prominent entity in the digital asset industry, announced a strategic investment in Kotani Pay, an African payment infrastructure provider. This investment aims to enhance digital asset accessibility and improve payment efficiency for small and medium-sized enterprises (SMEs) and individuals across Africa. The initiative specifically targets the reduction of high transaction costs, the shortening of settlement times, and the expansion of access to global financial networks, challenges historically faced by emerging markets.

The Event in Detail

The strategic investment by Tether in Kotani Pay focuses on strengthening Web3 payment infrastructure within Africa. Kotani Pay operates as an on-ramp/off-ramp infrastructure, connecting Web3 users with local payment channels across the continent. This system is designed to facilitate easy access to digital assets and streamline cross-border payment systems. By leveraging blockchain technology, Kotani Pay enables enterprises to manage international operations more efficiently, providing solutions for accessing global liquidity and transacting with ease. The investment aligns with Tether's broader mission to expand blockchain use cases, including cross-border payments and digital asset management, and to provide financial tools to underserved communities.

Market Implications

This investment is poised to significantly accelerate Web3 and stablecoin adoption in Africa. Sub-Saharan Africa recorded on-chain crypto transaction volumes exceeding US$205 billion between July 2024 and June 2025, representing a 52% year-on-year increase driven by retail usage and remittances in key markets such as Nigeria, Kenya, South Africa, and Ethiopia. The collaboration between Tether and Kotani Pay seeks to address critical issues such as high transaction costs, prolonged settlement times, and limited access to global financial networks, which have historically impeded economic growth for SMEs and corporations. By making digital assets and cross-border payment systems more seamless, the initiative is expected to foster greater financial inclusion and operational efficiency, thereby empowering individuals and businesses to participate more fully in the global economy.

Expert Commentary

Paolo Ardoino, CEO of Tether, has consistently highlighted blockchain's role in fostering financial freedom and empowering underserved communities. The investment in Kotani Pay is consistent with this vision, aiming to create systems that enable broader participation in the global economy. Felix Macharia, CEO and Co-founder at Kotani Pay, expressed anticipation regarding the collaboration, emphasizing the potential to leverage shared knowledge for advancing wealth creation tools for African individuals and businesses.

Broader Context

Tether's investment in Kotani Pay is part of its wider strategy to deepen its presence in Africa and other emerging markets. This commitment is also evidenced by Tether's leading role in a $10 million seed funding round for Dubai-based fintech Mansa, a platform facilitating instant settlement for payment companies primarily in Africa. Tether also signed a Memorandum of Understanding (MoU) with the government of Guinea to explore blockchain and peer-to-peer technologies, further demonstrating its focus on the continent. The regulatory landscape in Africa is evolving, with countries like South Africa and Nigeria moving towards formalized frameworks for digital assets. South Africa's Financial Sector Conduct Authority (FSCA) regulates crypto assets as financial products, while Nigeria integrated digital assets into its regulatory framework in March 2025, defining them as "securities." These regulatory developments signal a continent-wide shift towards comprehensive, regulated frameworks, supporting the integration of compliant financial technology. Stablecoins, including USDT, are increasingly utilized for remittances, trade settlements, and financial inclusion, providing practical solutions against high inflation and volatile local currencies.