Blockchain and the future of remittances to Kenya point to cheaper, faster cross-border money transfers, and PesaMarket tracks the services already delivering on that promise today. Here is what is happening now and what could happen next.
Blockchain technology promises to change how international payments work. Here is what is already happening, and what may happen.
How Blockchain Technology Can Help Remittances
The Challenges That Exist Today
Traditional remittances tend to involve:
- Many intermediaries
- Each one taking a fee
- Payment delays
- Prices that are not clearly visible
- Currency conversion costs
The Promise of Blockchain Technology
- Direct, person-to-person money transfers
- A single, clearly visible fee
- Payments that settle instantly
- Currency conversion handled by software
- Operation that runs 24 hours a day, 7 days a week
Current Remittance Projects Using Blockchain Technology
Ripple/XRP
What it does: Blockchain technology aimed at financial institutions.
Relevance to Kenya:
- Partnerships with some African banks.
- Cross-border payment trials.
- Has not yet gained major traction in Kenya.
Status: Growing, but it has not changed things significantly yet.
Stellar/XLM
What it does: Low-cost blockchain technology aimed at developing markets.
Relevance to Kenya:
- Has partnered with African organizations.
- Low fees suit small-value transfers.
- Some trials have been carried out.
Status: Promising technology, but its usage is still small.
Circle/USDC
What it does: A regulated stablecoin system.
Relevance to Kenya:
- Could make transfers easier with a stable value.
- Working on expansion across Africa.
- Regulatory certainty is needed.
Status: Growing internationally, but its usage in Kenya is small.
Chipper Cash
What it does: An electronic money service across Africa.
Relevance to Kenya:
- Available in Kenya.
- Uses various systems, including crypto/blockchain technology.
- Has an easy-to-use interface.
Status: Operational, growing.
Central Bank Digital Currencies (CBDCs)
What Are CBDCs?
Digital currencies issued by governments:
- They are official legal tender.
- They rely on blockchain or DLT technology.
- They are controlled by central banks.
- They are built for the digital age.
Kenya's CBDC Exploration
Timeline of Events:
- 2021: The Central Bank of Kenya (CBK) announces a project to explore CBDCs.
- 2022: A discussion paper is released.
- 2022-2023: Public consultations.
- Now: Research is ongoing.
- Launch: No specific date has been announced.
Possible Features:
- A digital KES currency.
- Possible integration with M-Pesa.
- New payment systems.
- The ability to move money from one country to another.
How CBDCs Could Change Remittances
Scenario: The sending country and Kenya both have CBDCs.
- Sender: Converts USD into digital USD.
- Instant conversion: Digital USD → digital KES.
- Recipient: Receives digital KES.
- Spends it immediately or converts it into M-Pesa.
Benefits:
- Very low fees (close to zero) could be possible.
- Payments available instantly.
- Backed by the central bank.
- No intermediaries.
Timeframe: 5-10 years for full implementation.
Integrated Solutions
Traditional Methods + Blockchain Technology
Current innovations:
- Traditional companies using blockchain technology within their systems.
- The user does not see the blockchain technology.
- The benefits of both sides.
Example:
- Some Wise transfers use blockchain systems.
- Remittance apps are trying out this technology.
- Internal systems are improved, but the user still sees the usual format.
Mobile Payment Services + Blockchain Technology
Possible integrations:
- M-Pesa using blockchain technology in payments.
- Faster integration of international payments.
- Lower costs in internal systems.
Status: Not yet implemented, but it could become usable in the future.
What Is Required
For Remittances Using Blockchain Technology to Work
- Legal clarity - Rules for the use of crypto/blockchain technology.
- Currency conversion services - Easy conversion between digital and traditional money.
- User-friendly environment - No technical skills required.
- Institutional participation - Banks and M-Pesa taking part.
- International cooperation - International standards.
Kenya-Specific Requirements
- A Central Bank of Kenya (CBK) framework for digital currencies.
- Integration of M-Pesa with blockchain systems.
- Bank participation in new systems.
- User education about new options.
Timeline Forecast
Short term (2024-2026)
- More services using blockchain technology (invisible to users)
- National digital currency (CBDC) trials in some countries
- Better "stablecoin" options
- Traditional services remaining important
Medium term (2026-2028)
- A possible CBDC in Kenya
- Blockchain networks becoming more common
- Lower costs for all services
- Hybrid services gaining popularity
Long term (2028+)
- CBDCs may become common
- Very cheap international payments
- Blockchain technology fully integrated
- The current system becoming outdated
A Realistic Assessment
What Is Possible
- Gradual improvement - Not a sudden revolution.
- A hybrid approach - Old methods + blockchain technology.
- Lower prices - As a result of all the innovation.
- More options - Not fewer options.
What Is Unknown
- The timing of CBDC implementation - Governments make changes slowly.
- Crypto technology regulation - It could go either way.
- The pace of adoption - Technology versus behavior.
- Which technology will win - There are many competitors.
What Is Not Possible
- Bitcoin becoming the standard for remittances - It is too expensive.
- Instant change - Change happens step by step.
- Traditional services disappearing - They will adapt instead.
For Senders: What to Do Now
Don't Wait for the Future
The best current options:
- Wise, Sendwave, and Remitly are already good.
- Fees are already low (1-2%).
- Speed is already fast (minutes).
Stay Informed
Watch for:
- New services entering Kenya.
- Announcements about CBDCs (Central Bank Digital Currencies).
- Regulatory changes.
- Cost improvements.
Be Ready to Switch
When you find a new option:
- Try it with a small amount.
- Compare it with existing services.
- Switch over if it is better.
For Recipients in Kenya
The Best Current Methods
- M-Pesa is still the most suitable method.
- Traditional services work well.
- Using digital currency (crypto) is an option for those who are tech-savvy.
Preparing for the Future
- Make sure your phone number stays active.
- Keep a bank account (the available options keep growing).
- Be open to new methods.
- Let senders know your preferences.
Companies Worth Following
In Remittances Using Blockchain Technology
| Company | Focus | Relevance to Kenya |
| Ripple | Banking infrastructure | Direct |
| Stellar | Growing markets | Growing |
| Circle | Stablecoin infrastructure | Has potential |
| Chipper Cash | African mobile services | In use |
| Wave | West/Central Africa | Could expand |
Traditional Companies That Are Changing
| Company | Blockchain Activity |
| Wise | Some blockchain systems |
| MoneyGram | Partnership with Stellar |
| Western Union | Blockchain trials |
Conclusion
Blockchain technology and the future of remittances:
- Change is coming, but step by step.
- The services available today are good - Don't wait.
- Central Bank Digital Currencies (CBDCs) could bring major change - This is for the long term.
- Traditional services will adapt - They will not disappear.
- User experience matters most - Technology is a means, not the goal.
The future looks promising, but today's best services are already very good. Use the services that work now, stay informed, and be ready to switch when better options become available.
Find the best options available today on our comparison page.