Central Bank has authorised Telkom Kenya's new T-Kash mobile money service.
CBK Governor Patrick Njoroge noted on Thursday that Telkom's entry means more choices for Kenyans.
"[It will] enhance competition and innovation in provision of digital financial services," Njoroge said in a statement.
Njoroge also noted the permission for Telkom to conduct business as a payment service provider
to the provisions of the national payments system.
Telkom revived its mobile money platform to rival M-Pesa and Airtel Money, eight months after rebranding from Orange.
T-Kash is replacing Orange Money whose plug was pulled in July 2017.
Subscribers will use a one-time eight-digit code to withdraw cash from an agent or ATM as well as to buy goods and services.
The code which is valid for 10 minutes is generated upon initiating the withdrawal transaction, which is presented to any agent in exchange for cash or keyed into the ATM.