Stablecoins are gaining rapid traction in Kenya, with cross-border traders, multinationals, and diaspora communities increasingly adopting them for faster and cheaper payments.
According to Chainalysis, Kenya transacted Ksh426.4 billion ($3.3 billion) in stablecoins in the year to June 2024, making it the fourth-largest recipient in Africa.
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As reported in the Business Daily, Stablecoins, cryptocurrencies backed by reliable assets like the US dollar, offer a cost-effective alternative to traditional payment systems, especially for cross-border transfers.
Local traders use them for imports, diaspora Kenyans for remittances, and multinationals for repatriating profits, often bypassing banks.
Crypto firm Yellow Card, a key player in Africa’s stablecoin infrastructure, says adoption began with remittances but has now expanded to businesses and gig workers. Firms like Starlink also use stablecoins for faster currency conversion and repatriation.
Transaction costs average 0.5% to 1%, far lower than banks and remittance firms which charge between 4-7%. Integration with mobile money platforms further eases access.
Despite their unregulated status in Kenya, stablecoins are increasingly seen as mainstream alternatives.
Globally, stablecoins have surged following supportive U.S. legislation. As banks feel the pressure, some financial institutions such as including JPMorgan and Visa are developing their own versions.
