Tether, the company behind the world's largest stablecoin, has signed a memorandum of understanding with the National Bank of Kazakhstan and the Alatau City Authority to explore a stablecoin pegged to the tenge and a framework for tokenizing real-world assets, the company announced Wednesday.

The memorandum's first objective is a stablecoin pegged to the tenge, Kazakhstan's national currency. Under the agreement, the three parties will study how other countries issue such tokens before preparing a concept and a pilot proposal, though the announcement does not specify which entity would issue the token. That leaves the proposed project at an exploratory stage rather than establishing a new currency or payment system.

The second pillar concerns tokenization—the practice of recording ownership of a real-world asset, such as a building or a bond, as a digital token on a blockchain. The parties will identify priority asset categories, design a model, and launch a pilot inside Alatau, potentially using Hadron, the tokenization platform Tether launched in November 2024. The memorandum sets no date for either pilot.

A memorandum of understanding is a written statement of what the parties intend to explore together—more handshake than binding contract. The deal also includes workshops to train central bank staff on issuing tokens, managing reserves, and tokenizing assets. The practical details still to be established include the proposed token's issuer, reserve arrangements, and how any pilot would operate under Kazakhstan's rules.

Alatau is a planned smart city in the Almaty region, built from scratch with its own legal regime and pitched as a fintech hub for Central Asia. The $7.2 billion project aims to grow from 52,000 residents to two million, and President Kassym-Jomart Tokayev has said he wants people there to pay for goods and services in cryptocurrency.

The agreement lands days after a Senate subcommittee report on Iran-linked USDT use and a lawsuit over a $2.76 million Tether freeze.

Kazakhstan's central bank has been steadily expanding its exposure to digital assets. In March, it earmarked up to $350 million for crypto-related investments out of nearly $70 billion in gold and foreign exchange reserves, though the money may go into shares of crypto-linked companies and index funds rather than coins. Officials said in September that the national crypto reserve has reached $700 million, with about $200 million invested so far, mostly through hedge funds—private pools that trade on behalf of large investors.

The country already runs a tenge stablecoin pilot called Evo, launched in September 2025 inside the central bank's regulatory sandbox, a supervised testing ground for new financial products. Evo was issued by the exchange Intebix and Eurasian Bank with help from Solana and Mastercard, while the central bank writes the rules of the test but does not issue the token itself. The existing Evo pilot provides a separate point of reference for the Tether-backed exploration, but the memorandum does not say whether the projects will be connected.

Separately, the National Bank has a plan to tokenize two Alatau properties, worth up to $50 million and $10 million respectively, by the end of 2026 on the Kazakhstan Stock Exchange's infrastructure. Those property plans and the proposed Alatau pilot make the selection of assets, the operating platform, and the eventual regulatory structure key details to watch as the parties move beyond the memorandum.