Introduction

Kenya and China have a long-standing trade relationship. From consumer electronics and textiles to beauty products, building materials, and machinery, thousands of Kenyan traders source goods directly from factories and wholesale markets in Guangzhou, Yiwu, and Shenzhen every month. However, while importing goods has become more straightforward, paying Chinese suppliers has not been as simple.

Traditional cross-border payment channels such as bank wire transfers, forex bureaux, and mobile money intermediaries have proven to be expensive, slow, and unpredictable. As a result, a growing number of Kenyan traders, especially small and medium-sized importers, are switching to crypto payments, particularly stablecoins like USDT (Tether) and USDC (USD Coin), to settle balances with Chinese suppliers.

Kenya’s import landscape is undergoing a quiet revolution. While traditional banking channels have long dominated international trade payments, a growing number of Kenyan traders are turning to cryptocurrency, particularly stablecoins, to pay for goods from China. This shift isn’t just a tech trend; it’s a practical response to real challenges in cross-border commerce.

This shift is a strategic response to delays, high fees, forex shortages, and operational inefficiencies in traditional finance. Crypto payments are enabling faster trade cycles, better cash flow management, and smoother international transactions.

In this article, we break down why this shift is happening, how the transactions are completed, the benefits for both traders and suppliers, and what risks and best practices to keep in mind.

Why Kenyan Traders Are Switching to Cross-Border Crypto Payments for Chinese Imports

Kenya has emerged as a major player in Africa’s cryptocurrency market, and the numbers are staggering. In the year ending June 2024, Kenyans transacted KSh 426.4 billion (approximately $3.3 billion) in stablecoins, ranking the country fourth globally in stablecoin usage, behind only Nigeria, South Africa, and Ghana. This massive volume reflects how deeply embedded digital currencies have become in Kenya’s business ecosystem.

The cryptocurrency revolution in Kenya isn’t just about volume; it’s about rapid mainstream adoption. Kenya experienced one of the world’s most dramatic surges in crypto adoption, climbing from 32nd place globally in 2023 to 17th in 2024, with transaction volumes doubling year-over-year. The country now ranks 28th worldwide in overall cryptocurrency adoption, and estimates suggest that between 8.5% and 10.71% of Kenya’s population, representing 4.25 million to 6.1 million people, currently holds cryptocurrencies. To put this in perspective, Kenya’s crypto adoption rate exceeds that of the United States, which sits at 8.4%.

What makes these numbers even more remarkable is the growth trajectory. The number of cryptocurrency users in Kenya skyrocketed from just 10,400 in 2017 to 493,500 in 2023, and projections estimate this will reach 733,300 by 2025. This represents a more than 47-fold increase in just eight years. Kenya now leads East Africa with approximately 12 million crypto users across the region, demonstrating the country’s pioneering role in digital asset adoption.

This crypto boom is happening against the backdrop of a massive trade relationship with China. Kenya’s imports from China continue to grow significantly, with China remaining the country’s largest import partner by far. In the third quarter of 2024 alone, imports from China rose to KSh 170.2 billion, up from KSh 119.7 billion in the same period of 2023. For the full year 2023, China supplied goods worth KSh 459 billion (approximately $3.6 billion) to Kenya, representing a substantial portion of the country’s total imports.

The scale of Kenya-China trade is impressive: in the first six months of 2024, spending on imports from China jumped 25.56% to KSh 257.70 billion, marking the fastest growth rate in three years. This surge was driven particularly by machinery and transportation equipment, including railway locomotives for the Standard Gauge Railway. Meanwhile, China’s exports to Kenya for the full year 2024 reached $8.58 billion, while Kenya exported only $221 million worth of goods to China in 2023, creating a massive trade imbalance of billions of dollars.

The top imports from China include electrical machinery, iron and steel (worth $275.23 million in 2023), vehicles, construction equipment, home appliances, and telecommunications equipment. These goods support Kenya’s infrastructure development, manufacturing sector, and consumer market. With China accounting for such a dominant share of Kenya’s import basket and cryptocurrency adoption soaring, the convergence of these two trends has created the perfect conditions for a payment revolution.

The Realities of Paying Chinese Suppliers the Traditional Way

1. High International Banking Fees

SWIFT wire transfers can cost anywhere from $30 to $60 per payment, not including intermediary banking fees that may be deducted without warning. For SMEs with tight margins, these fees add up quickly.

2. Slow Settlement Times

International transfers can take 2–5 business days to reflect. When dealing with suppliers who require quick confirmations to release shipments, delays can hold up the entire shipping timeline and inventory turnover.

3. Forex Volatility and Shortages

The Kenyan Shilling (KES) has experienced ongoing depreciation. Meanwhile, USD liquidity shortages make it difficult for traders to purchase dollars at fair rates. This leads to:

• Unexpected price changes
• Loss of negotiation power with suppliers
• Strained working capital

4. Complex Documentation and Bank Limitations

Banks often require:

•  Proof of trade history
• Import documentation
•  Compliance checks

While necessary, these processes can slow down payments, especially for newer importers or small-volume traders.

5. Advance Payment Requirements

Many Chinese suppliers require advance payments, but traditional banking systems offer limited control and transparency over whether quality goods will actually be delivered.

Why Crypto Is Becoming the Preferred Payment Method

Crypto payments specifically using stablecoins pegged to the US dollar have changed the game for Kenyan traders.

1. Faster Transactions

With stablecoin transfers on networks like TRON (TRC-20) or Ethereum (ERC-20), payments can be confirmed in minutes. A supplier can receive payment while still walking through a showroom in Guangzhou.

2. Lower Transaction Costs

Crypto transfer fees are often less than $1, and many exchanges charge 0% to 1% transaction fees, depending on the method. This dramatically cuts operational costs.

3. Direct and Borderless

• No intermediary banks. No third-party processors. Just wallet-to-wallet transactions.
• Payments can be made 24/7, including weekends and holidays.
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4. Stable Value Storage

Unlike Bitcoin or Ethereum, stablecoins maintain a steady value pegged to the USD, making them ideal for commerce:

• USDT = ~1 USD
• USDC = ~1 USD

This stability enables traders and suppliers to agree on prices without worrying about exchange rate swings.

In wholesale markets like Guangzhou’s Baiyun District, Yiwu International Trade City, and Shenzhen Electronics Market, USDT is now as common as WeChat Pay for bulk buyers

How Kenyan Traders Actually Pay Suppliers Using Stablecoins (Step-By-Step)

1. Purchase Stablecoins Locally

• Buy USDT/USDC through:
• Local crypto exchanges
•  P2P marketplaces
• Trusted OTC (over-the-counter) agents

2. Store Coins in a Wallet

Common wallets used:

• Binance Wallet
• OKX Wallet
• Trust Wallet
• Yogupay Waas
• Ledger (cold storage for high-volume traders)

3. Confirm Supplier Wallet Address

• Supplier shares a secure wallet address
• Always verify the right network (e.g., TRC-20 vs ERC-20)

4. Send Payment

• Transaction settles in seconds to minutes
• Supplier receives instantly
• Supplier clears goods for shipment or releases the order to the freight forwarder

5. Keep Transaction Records

• For business bookkeeping
• For KRA import compliance and audit trail

Risks and Things to Watch Out For

Crypto payments are powerful, but they require caution.

1. Regulatory Uncertainty

Kenya has not banned crypto but regulates its use lightly. Ensure you:

• Keep clear financial records
• Report income appropriately
• Stay updated on CBK & KRA guidelines

2. Security Risks

Crypto transactions are irreversible. If you send to the wrong wallet, funds cannot be retrieved.

Safety Tips:

• Always verify supplier wallet addresses twice.
• Use escrow when dealing with new suppliers.
• Use hardware wallets for storage above KES 300,000.

3. Supplier Verification

• Scams happen. Always:
• Request video call confirmations
• Work with established sourcing agents
• Use reputable freight forwarders

The Tax Question: From Controversy to Clarity

Kenya Revenue Authority has not been idle in addressing the crypto economy. Recognizing that cryptocurrency transactions in 2022 were valued at around $18.6 billion (KSh 2.4 trillion), potentially higher than transaction volumes handled by some commercial banks, the taxman has been developing sophisticated systems to track and collect taxes on crypto trading.

The journey toward effective crypto taxation in Kenya has been tumultuous but ultimately progressive. Initially, the government introduced a controversial 3% Digital Asset Tax (DAT) in September 2023, which was applied to the gross transaction value of every cryptocurrency transfer. This meant that traders paid 3% tax whether they were buying, selling, or even simply transferring funds between their own wallets. The policy was deeply unpopular within the industry.

Critics argued that the tax design was fundamentally flawed. As one parliamentary committee chair put it, “This is the equivalent of being taxed for depositing money in your bank.” The tax could wipe out small gains entirely, offered no relief for losses, and discouraged both retail and institutional investors from participating in the market. Between September 2023 and June 2025, KRA collected KSh 1.1 billion under this regime, but the tax was widely seen as stifling market growth and liquidity.

The Game-Changing Reform

In a major policy shift that took effect July 1, 2025, Kenya repealed the 3% Digital Asset Tax and replaced it with a more sensible 10% excise duty on fees and commissions charged by licensed crypto platforms. This change represents a fundamental rethinking of how to tax digital assets in Kenya.

Under the new framework, crypto exchanges and brokers now pay excise duty on the service fees they charge users, rather than on the total value of digital asset trades. For individuals and companies, income tax or capital gains tax still applies, depending on whether virtual assets are held, traded, or received as payment for services. The shift aligns Kenya’s approach with global best practices and mirrors taxes already imposed on banks and payment service providers.

Industry stakeholders have welcomed this reform as a “pro-innovation” move. The blockchain industry even participated in roundtable discussions with KRA through industry lawyers to help shape the new framework. “It was encouraging to see open dialogue between regulators and industry stakeholders. That kind of collaboration is what will move this space forward,” noted one industry representative.

Real-Time Monitoring Systems

Beyond changing the tax structure, KRA is implementing cutting-edge technology to monitor crypto transactions. The authority is developing a real-time tax system that will integrate directly with cryptocurrency exchanges and marketplaces, allowing it to track and record transactions as they happen. The system will capture transaction details, including date, time, type, and value of each transaction.

KRA has acknowledged that it previously struggled to track and tax crypto transactions due to outdated systems, leading to “significant loss of revenue for the government.” The new system aims to be robust and efficient, enabling KRA to collect taxes on cryptocurrency effectively while using artificial intelligence and machine learning to analyze data and detect tax evasion.

Industry Perspective: Progress with Caution

However, many traders and industry observers view this evolution as a sign of market maturity rather than a deterrent. Proper regulation and taxation may actually increase confidence and mainstream adoption by legitimizing the sector and providing clearer operating rules.

Industry voices emphasize that the challenge isn’t whether crypto should be taxed, but how to do it effectively. “An easier solution is a tax on on-ramp and off-ramp events. That’s it,” argued one legal expert, noting the complexity of taxing thousands of different tokens. “There are thousands of tokens. How do you even value 1.5% of Dogecoin, convert, and remit daily?”

Critics also warn that Kenya must avoid overtaxation that could drive traders to offshore or peer-to-peer platforms. Indonesia’s experience is instructive: after implementing a 0.1% crypto transaction tax in 2022, revenue fell by over 60% as users migrated elsewhere. Kenya’s approach must balance revenue collection with maintaining an attractive environment for innovation.

The Regulatory Framework

The tax reforms complement the broader Virtual Assets Service Providers (VASP) Act, which came into force in 2025. The VASP Act requires all crypto platforms operating in Kenya to register with the Central Bank of Kenya, maintain physical offices, conduct Know Your Customer (KYC) checks, and have Kenyan representation on their boards. The law also enforces strict anti-money laundering and counter-terrorism financing obligations, aligning Kenya’s regime with standards set by the Financial Action Task Force (FATF).

This coordinated approach combining reasonable taxation with comprehensive regulation positions Kenya as a leader in building what one industry player called “a fair, transparent digital asset ecosystem.” As another stakeholder noted, “With taxation and regulation now taking shape, we can finally focus on innovation, compliance, and expanding access to digital finance across the region.”

For Kenyan traders using crypto to pay for Chinese imports, these developments provide greater clarity and legitimacy to their operations, even if it means accepting the responsibilities that come with a maturing market.

Conclusion

The rise of cryptocurrency payments for Kenyan imports from China is more than a technological curiosity; it’s a fundamental shift in how cross-border commerce operates. By offering lower costs, faster transactions, and greater control, digital currencies are empowering Kenyan traders to compete more effectively in the global marketplace.

What makes Kenya’s crypto adoption particularly remarkable is how it builds upon an already revolutionary foundation. The country that gave the world M-Pesa, the mobile money platform that transformed financial inclusion across Africa, is now pioneering the next evolution of digital finance. With over 86% of adult Kenyans financially included through mobile money and over 91% mobile money penetration as of 2025, Kenya has created the perfect launching pad for cryptocurrency adoption. The seamless integration between M-Pesa and cryptocurrency exchanges means that traders can convert Kenyan Shillings to stablecoins within seconds using the same mobile platform they already trust for daily transactions.

This convergence of mobile money infrastructure and cryptocurrency innovation positions Kenya uniquely on the global stage. While other nations struggle with basic financial inclusion, Kenya is leapfrogging traditional banking entirely, moving directly from cash to mobile money to cryptocurrency. The country’s approach demonstrates what industry experts call “the M-Pesa advantage,” a digitally literate population already comfortable with cashless transactions and mobile-first financial services, making the transition to blockchain-based payments remarkably smooth.

Kenya’s crypto revolution is part of a broader transformation sweeping across Sub-Saharan Africa. The region has emerged as the third fastest-growing crypto market globally, with on-chain transaction volumes surging 52% to reach over $205 billion between July 2024 and June 2025. This growth trajectory places Africa alongside Asia-Pacific (69% growth) and Latin America (63% growth) as the world’s hottest crypto adoption zones, far outpacing the more mature but slower-growing markets of North America and Europe.

Kenya’s approach to digital finance is earning global recognition. The country serves as a model for how emerging markets can leverage technology to achieve financial inclusion at scale. While developed nations debate crypto regulation, Kenya is actively building the infrastructure of tomorrow’s financial system.

Major international companies are adapting to this new reality. Even global enterprises like Starlink reportedly convert Kenyan Shilling payments into stablecoins for international fund repatriation, recognizing that cryptocurrency offers superior efficiency for cross-border value transfer. This trend will only accelerate as more businesses discover the cost savings and operational advantages of blockchain-based payments.

As Kenya continues to lead Africa in cryptocurrency adoption and as China remains the country’s largest import source, we’re witnessing a pivotal convergence of necessity and innovation. The traders making this switch aren’t just early adopters chasing the next trend; they’re pragmatists choosing the most efficient tools available for their business success. When a payment method can save 85% on transaction fees while delivering faster settlements, the choice becomes obvious.

The next chapter of this story is already being written. With cryptocurrency insurance now available in Kenya, improved regulatory frameworks reducing operational risks, and major banks launching crypto custody services, the infrastructure supporting digital asset adoption is maturing rapidly. The challenge now shifts from “Can we use crypto for trade?” to “How can we optimize our crypto payment strategies?”

Thousands of Kenyan traders have already switched to faster, cheaper crypto payments.
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