Blockchain and the Future of Kenya Remittances

Blockchain technology promises to revolutionize cross-border payments. Here's what's happening and what might come.

How Blockchain Could Help Remittances

Current Pain Points

Traditional remittances involve:

• Multiple intermediaries
• Each taking fees
• Settlement delays
• Opaque pricing
• Currency conversion costs

Blockchain Promise

• Direct peer-to-peer
• Single transparent fee
• Near-instant settlement
• Programmatic conversion
• 24/7 operation

Current Blockchain Remittance Projects

Ripple/XRP

What they do: Enterprise blockchain for financial institutions

Kenya relevance:

• Partnerships with some African banks
• Cross-border payment pilots
• Not yet mainstream in Kenya

Status: Growing, but not transformative yet

Stellar/XLM

What they do: Low-cost blockchain for developing markets

Kenya relevance:

• Partnered with African organizations
• Low fees suit small transfers
• Some pilots conducted

Status: Promising technology, limited adoption

Circle/USDC

What they do: Regulated stablecoin infrastructure

Kenya relevance:

• Could enable stable-value transfers
• Working on African expansion
• Regulatory clarity needed

Status: Growing globally, Kenya limited

Chipper Cash

What they do: Mobile money across Africa

Kenya relevance:

• Available in Kenya
• Uses various rails including crypto/blockchain
• User-friendly interface

Status: Active, growing

Central Bank Digital Currencies (CBDCs)

What Are CBDCs?

Government-issued digital currencies:

• Official legal tender
• Blockchain or DLT-based
• Central bank controlled
• Designed for digital age

Kenya's CBDC Exploration

Timeline:

• 2021: CBK announces CBDC exploration
• 2022: Discussion paper released
• 2022-2023: Public consultation
• Current: Research ongoing
• Launch: No timeline announced

Potential Features:

• Digital KES
• M-Pesa integration possible
• New payment rails
• Cross-border capability

How CBDCs Could Transform Remittances

Scenario: Both sender country and Kenya have CBDCs

1. Sender converts USD to digital USD
2. Instant exchange digital USD → digital KES
3. Recipient receives digital KES
4. Uses immediately or converts to M-Pesa

Benefits:

• Near-zero fees possible
• Instant settlement
• Central bank backing
• No intermediaries

Timeline: 5-10 years for full implementation

Hybrid Solutions

Traditional + Blockchain

Current innovations:

• Traditional companies using blockchain backend
• User doesn't see the blockchain
• Benefits of both worlds

Examples:

• Some Wise transfers use blockchain rails
• Remittance apps experimenting
• Backend improvements, familiar frontend

Mobile Money + Blockchain

Potential integration:

• M-Pesa settling via blockchain
• Faster international integration
• Lower backend costs

Status: Not implemented, but possible future

What Needs to Happen

For Blockchain Remittances to Work

1. Regulatory clarity - Rules for crypto/blockchain
2. Fiat on/off ramps - Easy conversion
3. User-friendly interfaces - No technical knowledge needed
4. Institutional adoption - Banks and M-Pesa on board
5. Cross-border cooperation - International standards

Kenya-Specific Requirements

1. CBK framework for digital currencies
2. M-Pesa integration with blockchain rails
3. Bank participation in new systems
4. Consumer education about new options

Timeline Predictions

Short Term (2024-2026)

• More blockchain-backed services (invisible to users)
• CBDC pilots in some countries
• Improved stablecoin options
• Traditional services remain dominant

Medium Term (2026-2028)

• Kenya CBDC possible
• Blockchain rails more common
• Lower costs across the board
• Hybrid services mainstream

Long Term (2028+)

• CBDCs potentially standard
• Near-free cross-border payments
• Blockchain fully integrated
• Current model obsolete

Realistic Assessment

What's Likely

• Gradual improvement - Not sudden revolution
• Hybrid approach - Traditional + blockchain
• Lower costs - From all innovations
• More options - Not fewer

What's Uncertain

• CBDC timelines - Governments move slowly
• Crypto regulation - Could go either way
• Adoption pace - Technology vs. behavior
• Which technology wins - Multiple competitors

What's Unlikely

• Bitcoin as remittance standard - Too volatile
• Overnight transformation - Change is gradual
• Traditional services disappearing - They'll adapt

For Senders: What to Do Now

Don't Wait for the Future

Current best options:

• Wise, Sendwave, Remitly are already excellent
• Costs already low (1-2%)
• Speed already fast (minutes)

Stay Informed

Watch for:

• New services entering Kenya
• CBDC announcements
• Regulation changes
• Cost improvements

Be Ready to Adapt

When new options emerge:

• Test with small amounts
• Compare to existing services
• Adopt if genuinely better

For Kenya Recipients

Current Best Practices

• M-Pesa remains most practical
• Traditional services work well
• Crypto optional for tech-savvy

Future Preparation

• Keep phone number active
• Stay banked (options increase)
• Be open to new methods
• Let senders know preferences

Companies to Watch

In Blockchain Remittances

Traditional Adapting

The Bottom Line

Blockchain and future remittances:

1. Change is coming but gradual
2. Current options are good - Don't wait
3. CBDCs could be transformative - Long-term
4. Traditional will adapt - Not disappear
5. User experience matters most - Technology is means, not end

The future is promising, but today's best services are already excellent. Use what works now, stay informed, and be ready to adapt when genuinely better options emerge.

Find today's best options on our comparison page.