Swypt, a decentralized finance platform, has successfully integrated cKES, Kenya’s first decentralized stablecoin, on Mento, a separate decentralized platform pegged 1:1 to the Kenyan shilling. This strategic development underscores a rising trend in Kenya’s fintech industry, where stablecoins are increasingly recognized as viable alternatives to traditional mobile money and banking systems. However, the changing regulatory environment in the country could have a significant effect on the platform’s growth potential.
Founded in May 2023 by Davis Thoyah, Swypt aims to tackle inefficiencies in peer-to-peer (P2P) cryptocurrency trading. The platform made its debut at ETHSafari 2023 and officially launched in June 2024. It provides a comprehensive suite of payment solutions, including stablecoin transactions and payments for small and medium-sized enterprises (SMEs), designed to enhance accessibility and efficiency within the digital payments ecosystem.
The integration of cKES enables users to conduct cross-border transactions, addressing the increasing demand for faster and more cost-effective payment options in a market that is becoming increasingly crypto-savvy. Nevertheless, potential regulatory changes in Kenya could present challenges for Swypt. The National Treasury’s proposed Virtual Asset Service Providers Bill (2025) suggests that cryptocurrency firms must establish local offices in Kenya and appoint executives who are subject to regulatory approval. If enacted, this bill would empower the government to license and regulate crypto service providers within the country, potentially introducing new operational hurdles for platforms like Swypt.
Additionally, the Finance Act of 2023 has introduced a 3% tax on income generated from the sale of digital assets, including cryptocurrencies and non-fungible tokens (NFTs). This tax policy reflects the Kenyan government’s intention to integrate digital assets into its formal tax framework, presenting both an opportunity for revenue generation and potential friction with users who may encounter higher transaction costs.
Under the proposed Virtual Asset Service Providers Bill, the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA) would collaborate to regulate the cryptocurrency sector. The CBK would oversee service providers offering payment and currency-related solutions, while the CMA would regulate entities involved in crypto trading, exchanges, and initial public offerings of virtual assets. While these regulations could lend legitimacy to the industry, they may also impose new compliance burdens on decentralized platforms like Swypt.
These developments present both opportunities and challenges for Swypt, which will need to adeptly navigate the regulatory landscape. Compliance with local office requirements and executive vetting could enhance operational transparency, but may also lead to increased administrative costs. Furthermore, the 3% digital asset tax could affect user adoption, particularly if it raises transaction costs or diminishes the attractiveness of crypto-based solutions for price-sensitive users.
Currently, Swypt serves as an alternative payment rail for SMEs, gig workers, and cross-border traders. The platform’s success will depend on its ability to navigate the changing regulatory environment, achieve merchant adoption, and persuade Kenyan users of cKES’s viability as a competitive alternative to traditional mobile money services.
