Kenya Embraces Stablecoins for Faster Global Trade

Nairobi — As Kenya continues to position itself as one of Africa’s leading innovation hubs, experts say the adoption of digital currencies, particularly stablecoins, is rapidly transforming how individuals and businesses transact across borders.

Sharon Tum, East Africa Regional Manager at Yellow Card, a digital assets and treasury management company, explains that stablecoins are digital assets directly backed by real-world currencies such as the US dollar.

“These coins, often referred to as cryptocurrencies or digital coins, are issued by different companies. For instance, USDC is issued by Circle and regulated by the U.S. Federal Government, while USDT is issued by Tether,” she said.

Stablecoins are fast becoming among the most preferred digital assets in Kenya and across the continent due to their stability, accessibility, and efficiency in cross-border transactions.

Tum noted that because these coins are backed by actual assets, it means that for every unit of USDT or USDC in circulation, there is a corresponding U.S. dollar held in reserve, shielding them from the volatility that plagues other cryptocurrencies.

Additionally, the coins operate on secure blockchain technology, which enables traceability and reduces the risk of tampering or fraudulent transactions.

“They have deep liquidity. They’re super accessible. Always available. There are no queues. There are no limits. You can trade as high as you can,” Tum said. “They’re internationally accepted. A trader in China accepts USDT and USDC quite easily. It has been very attractive to business people because of cross-border payments.”

Unlike the traditional banking system, which often involves high transaction fees and delays, stablecoins offer instant and low-cost transfers regardless of the amount or destination.

This advantage has prompted many Small and Medium-sized Enterprises (SMEs), particularly importers, to leverage stablecoins to pay suppliers in markets like China and Dubai.

“It’s quite cheap and requires very minimal paperwork. Once you’re onboarded, for example, with Yellow Card, the process is very straightforward,” Tum said.

Yellow Card operates in 24 African countries and allows users to buy, sell, and convert digital assets such as stablecoins into local currency through its app.

According to Tum, the platform has more than two million users across Africa, including over 350,000 in Kenya, the majority being young people.

“Stablecoins are assets that run on the blockchain,” she explained. “They’re also referred to as cryptocurrencies or digital coins, and they’re issued by various companies. Kenya is one of the biggest countries using digital assets, and Yellow Card is one of the locally registered platforms offering this service. The uptake is quite strong.”

Toom believes the upcoming Virtual Assets Bill, 2025, currently before Parliament, will be a game-changer for Kenya’s digital asset industry as it provides a legal blueprint for regulating the rapidly expanding sector.

The Virtual Asset Service Providers (VASP) Bill, 2025 aims to create a framework for companies offering virtual asset services in the country, requiring them to obtain licenses and comply with regulatory standards.

Yellow Card has been part of the technical working group that has worked closely with the Parliamentary Committee on Finance since 2023 to help draft and refine the bill to balance innovation and regulation.

“As I mentioned before, we met them in Naivasha as part of the technical working group to go through the A to Z about digital assets–the innovation behind them, what other jurisdictions have done. They came up with a very good, progressive bill,” she said.

As more businesses across Africa embrace stablecoins, Toom predicts that banks and ATMs will soon integrate digital currencies to stay relevant in a fast-changing financial landscape.

“There’s innovation in how payments are evolving,” she said. “I can now have my Bitcoin and use it with a Visa card. Visa and Mastercard are seriously looking into incorporating stablecoins into their payment schemes.”

By Capital FM.