Kenya

CBK's sceptical_no_pilot CBDC stance is the emerging world's most considered case against retail CBDC

CBK's February 2022 discussion paper and its 2024 update concluded that M-Pesa and PesaLink already deliver the benefits a retail Digital Shilling would claim, and that issuing one would risk bank disintermediation in a market where bank balance sheets are thin. Status is sceptical_no_pilot per the XBY taxonomy — explicitly preserved here, not flattened to 'no pilot.' The CBK position has become a reference point for other emerging-market central banks (notably Nigeria post-eNaira, and several SADC peers) evaluating retail-CBDC value cases.

Safaricom controls ~95% of Kenyan retail-payment transactions

M-Pesa moves KES 83.7 trillion (~US$650bn) annually — roughly four times Kenyan GDP — and Safaricom controls about 95% of retail-payment transactions; CBK has classified the platform as systemically important. The single-operator dependency is the structural risk that the 2022-2025 National Payments Strategy is intended to address through interoperability mandates and PesaLink scaling. The May 2026 launch of M-Pesa-routed Treasury bill and bond subscriptions extends Safaricom's reach into retail capital-markets distribution; the policy direction is to widen the rail without weakening it.

Diaspora remittance inflows hit US$4.94bn in 2024 — a structural support to the shilling

Kenya received US$4.94bn in formal diaspora remittances in 2024 (+17% YoY); the US is the dominant origin at US$2.1bn followed by Saudi Arabia, the UK and Germany. The flow was a primary contributor to the post-Eurobond shilling stabilisation and feeds directly into M-Pesa Global, LemFi, Wise and Nala wallets. The Aani-M-Pesa bilateral rail (UAE-Kenya, live H2 2025) is the first bilateral instant-payment corridor on the inbound side; UPI-M-Pesa and Pakistan Raast-M-Pesa are in discussion.

CBK's 2022 Kenya Quick Response Code standard and the National Payments Strategy mandate full wallet-to-bank, wallet-to-wallet and merchant QR interoperability; PesaLink-M-Pesa direct rail is live since 2023 and progressed to full bank-to-wallet interoperability in March 2026. The opening for non-Safaricom operators is in catching the share that interoperability mandates redistribute — Airtel Money, T-Kash, Equitel and the banking sector all have direct M-Pesa rail access for the first time. PesaLink scaling is the visible measure: 64m transactions in 2024 is less than a single week of M-Pesa volume.

M-Pesa Global, LemFi, Wise and Nala are compressing US/UK corridor costs below 4%; the GCC-to-Kenya leg (Saudi Arabia, UAE) remains above 5% but the Aani-M-Pesa bilateral (UAE-Kenya, live H2 2025) is the first structural compressor. Hustler Fund-linked remittance products that deposit directly into the CBK-administered scheme open a new product layer; STC Pay Kenya integrations remain a 2026 opportunity. The structural pool — US$4.94bn formal, growing 17% — is the second-largest African remittance corridor on a per-capita basis.

Kenya's VASP framework (gazetted March 2025) creates a licensing regime for crypto exchanges and custodians under dual CBK/CMA supervision; ends the regulatory silence that left Kenya in Chainalysis' top-5 P2P markets. Yellow Card and Binance operated in the grey zone for years; first VASP licences are issuing through 2026. The opening is in domestic VASP-licensed players (Kotani, Yellow Card, Binance KE), in stablecoin-to-KES corridors for remittance use cases, and in the first compliant tokenised-deposit pilots from the commercial banks.