Kenya’s financial landscape is experiencing a significant transformation driven by the rapid growth of stablecoins. Once a niche tool for diaspora remittances, stablecoins have developed into a key component of digital finance, redefining how money moves across borders and within the local economy. According to Chainalysis, Kenyans carried out transactions worth KSh 426.4 billion in stablecoins between January 2023 and June 2024, a figure that highlights the increasing integration of digital assets into mainstream commerce.

The appeal of stablecoins lies in their ability to balance stability, speed, and cost efficiency. Backed by assets such as the U.S. dollar, they provide the reliability of traditional currency combined with the flexibility of blockchain technology. For Kenyans in the diaspora, stablecoins have become the preferred way to send money home. Fees that once took up significant portions of remittances have dropped to less than 1%, while transactions that previously took days now settle in minutes. This accessibility has made them the digital equivalent of mobile money on the global stage.

Businesses have quickly adapted. Importers and exporters now use stablecoins to simplify international trade and manage liquidity. A tea exporter in Kericho or a Maasai shuka trader in Narok can receive payment from a buyer in New York within five minutes, converting it into shillings via connections with fintechs, banks, and mobile money providers. Startups like Yellow Card have developed infrastructure to support this change, linking digital wallets with local financial systems and allowing smooth conversions between cash and crypto.

What makes this moment significant is not just the technology but also the principle behind it: permissionless finance. Stablecoin transactions occur without the need for central approval, empowering individuals and businesses to transact freely. Kenya’s familiarity with mobile money makes this evolution a natural progression. Just as M-Pesa democratised domestic transactions, stablecoins are democratising cross-border finance.

Multinationals are also adapting. Companies like Starlink have started converting payments made in Kenyan shillings into stablecoins for repatriation, avoiding traditional banking delays and costly foreign exchange fees. The effectiveness of such systems indicates a wider shift towards decentralised payment networks that challenge established intermediaries.

However, this development offers both opportunities and challenges. For banks, stablecoins pose a threat to their traditional role as intermediaries in international payments. In the United States, major institutions such as JPMorgan Chase and VISA are creating their own stablecoin solutions to stay competitive. Kenyan banks will likely need to follow suit eventually, adopting blockchain-based systems to remain relevant in a market that increasingly values speed, transparency, and lower transaction costs.

The regulatory issue remains unresolved. Kenya has not yet passed specific legislation on stablecoins; however, the proposed Virtual Assets Providers Bill indicates that eventual regulation is forthcoming. A clear framework would increase confidence among businesses and investors, encouraging responsible growth. The passage of the Genius Act in the U.S. has already established a global precedent, providing a model that balances innovation with accountability.

Stablecoins are transforming Kenya’s financial system in real time. They have highlighted the inefficiencies of legacy payment methods and shown that value can be transferred securely and instantly without intermediaries. If regulators, banks, and fintechs work together, Kenya could position itself as Africa’s centre for digital asset innovation. However, failing to adapt could result in the traditional banking sector being sidelined as new networks of value exchange emerge.

Kenya’s history with mobile money offers a clear lesson: adopting innovation early fosters leadership. Stablecoins could be the next chapter in that story, a chapter where technology, inclusion, and financial independence converge to transform the way money flows through the country and around the world.