Kenya's financial sector is about to witness what could be a groundbreaking shift in cross-border payments. Credit Bank PLC, licensed by the Central Bank of Kenya, has partnered with Anzens to explore integrating USDA stablecoin payments into its banking services.
What stands out is the timing. Kenya processed $3.3 billion in stablecoin transactions in the year to June 2024, while diaspora remittances hit a record $5 billion in 2024 according to the Central Bank of Kenya. These remittances now surpass tea and horticulture as leading foreign exchange sources.
The Cost Problem
Current SWIFT-based correspondent banking routes transactions through three to five intermediary banks. Each adds fees and delays, with settlement typically taking four to five working days.
The World Bank estimates global average remittance costs at 6.45%, rising to nearly 8% across Sub-Saharan African corridors. I have seen how this significantly impacts margins for importers and exporters trading across Asia, the Middle East and within Africa.
Regulatory Integration Approach
The partnership with Anzens, issuer of USDA (a dollar-backed stablecoin), remains in an exploratory phase subject to ongoing engagement with the Central Bank of Kenya. This is not another standalone crypto product launch.
If approved, USDA would function as payments infrastructure within the banking system. Credit Bank account holders could convert fiat currency to USDA and back, settling cross-border payments at a flat 1.5% fee regardless of corridor.
"Kenya is home to one of the most innovative financial ecosystems in the world, yet businesses here still pay some of the highest cross-border payment fees globally," said Shantnoo Saxsena, CEO of Anzens.
How It Would Work
Transactions would be initiated through existing Credit Bank accounts, with automatic conversion to local currency at the destination. Users retain the option to convert back to fiat at any time.
This represents a potential first for emerging markets - a dollar-backed stablecoin distributed, minted and redeemed through a licensed commercial bank, embedded within existing banking relationships rather than operating separately.
The biggest obstacle to stablecoin adoption in conventional commerce has not been the technology, but converting between fiat and digital dollars through regulated channels. This partnership could solve that problem for Kenyan businesses.
Given Kenya's leadership in mobile money innovation and the growing demand for efficient cross-border payment solutions, this exploratory partnership reflects broader interest in modernising international payments by bridging traditional finance with blockchain technologies. The regulatory approval process will be crucial for financial technology developments across East Africa.