After changing the world with M-Pesa, Kenya is turning to blockchain for its next financial innovation.
At the heart of this push is the Kenya Digital Token (KDT), a Solana-based coin announced by former Prime Minister Raila Odinga on Thursday to empower young people with tools for trading, investing, and building in the global digital economy.
“This initiative will empower young people by creating opportunities to learn, trade, or invest in cryptocurrency. It would also boost innovation, entrepreneurship, and wealth creation with a growing digital economy,” Odinga said in a video shared on social media.
He added, “Kenya is stepping up to lead Africa into the crypto revolution, embracing digital finance and shaping a more crypto-friendly future.”
Why Kenya wants a digital token
The region has one of the most vibrant fintech ecosystems in Africa. Its citizens embraced mobile money early, with M-Pesa becoming a lifeline for payments, savings, and credit.
The digital token builds on that legacy but introduces something new: a borderless blockchain-powered currency.
The benefits could be significant:
Financial inclusion: Millions of Kenyans outside the traditional banking system could now transact globally.
Cheaper transactions: Running on Solana means lower costs, an essential factor for small businesses and startups in the country.
Global access: Entrepreneurs and youth can tap into international crypto markets, investment platforms, and decentralised finance (DeFi) tools.
Interestingly, the KDT is not a government-issued currency like Nigeria’s eNaira. Instead, it is a private-sector innovation endorsed by the Ministry of Information, Communications, and the Digital Economy (MICDE).
ICT Cabinet Secretary William Kabogo framed it as aligned with Kenya’s bottom-up economic transformation agenda, noting that it complements efforts to expand digital inclusion and empower the youth.
This makes the KDT more flexible than a Central Bank Digital Currency (CBDC), since it is community-driven but still supported by national policy.
The tax angle
Crypto taxation has been a hot-button issue for Kenyans. In 2023, the government introduced a 3 per cent Digital Asset Tax on all transactions, including those made at a loss or transfers between personal wallets. The policy was widely criticised for stifling innovation.
In July, the government scrapped that tax and replaced it with a 10 per cent excise duty on service fees collected by exchanges and wallet providers. The change was designed to be fairer and more growth-friendly.
This timing matters: the launch of KDT is happening just as Kenya’s crypto sector is becoming more business- and user-friendly under the new tax structure.
What sets it apart from Nigeria’s eNaira
Nigeria was the first African nation to introduce a digital currency when it launched the eNaira in 2021, but Kenya’s approach is taking a very different direction.
The eNaira is a Central Bank Digital Currency (CBDC), issued and controlled by the government and intended to serve as legal tender.
Even though it has a strong status, the currency hasn’t been widely accepted, as many Nigerians are still wary of using a government-backed digital coin.
While some local exchanges like Busha and Quidax have listed it, major platforms like Yellow Card have been hesitant, pointing to regulatory and transparency concerns.
The awaiting digital token departs from this model. Unlike the centrally managed eNaira, the KDT is being developed by the private sector and built on the Solana blockchain.
Although the Ministry of Information, Communications, and the Digital Economy endorses it, the central bank does not directly issue it.
This structure allows for greater flexibility and could resonate more strongly with young people and entrepreneurs already active in digital markets.