Kenya is moving to tighten oversight of its fast-growing crypto sector with new draft rules proposing steep entry requirements for stablecoin issuers and other virtual asset firms.
Under proposals released by the National Treasury, companies looking to issue stablecoins would be required to:
Hold a minimum paid-up capital of KES 500 million (about $3.85 million), one of the highest thresholds in the framework.
Hold capital equivalent to 100% of current liabilities for 30 days minimum.
Not issue or grant interest related to stablecoins.
For tokenized asset offerings, issuers will need:
Capital requirements of ~$1.5 million in paid-up capital
Liquid capital of ~$310,000
The draft regulations aim to formalise the country’s digital asset market, strengthen consumer protection, and address concerns raised by the Financial Action Task Force (FATF), which has pushed for stricter oversight of crypto activity in high-usage markets like Kenya.
Beyond capital requirements, stablecoin issuers would need to fully back their tokens with high-quality liquid assets such as cash or bank deposits. These reserves must be segregated from company funds, held with approved custodians, and readily available for redemption at all times.
The rules also introduce disclosure obligations similar to capital markets prospectuses. Issuers would be required to publish detailed white papers outlining their operations, governance, risk factors, and how user funds are managed, with company directors held accountable for the accuracy of this information.
Regulatory oversight will depend on how the assets are used: stablecoins functioning as payment instruments would fall under the Central Bank of Kenya, while tokenised real-world assets classified as investments would be supervised by the Capital Markets Authority.
REGULATION | USDC Stablecoin Issuer, Circle, Already in Talks with Kenyan Government to Launch its Payments Network
While the framework could boost trust and institutional participation, it may also raise barriers to entry. Smaller startups could struggle to meet capital, compliance, and liquidity requirements, potentially leaving the market dominated by banks and well-capitalised global players.
Industry stakeholders have until April 2026 to submit feedback, with some already advocating for a tiered approach that would ease requirements for smaller projects while maintaining stricter standards for large-scale issuers.
REGULATION | ~50 Virtual Asset Firms Looking to Set up Regional HQs in Kenya, Says Nairobi International Finance Center (NIFC)
Stay tuned to BitKE for crypto regulatory updates from across Africa.
Join our WhatsApp channel here.
Follow us on X for the latest posts and updates
Join and interact with our Telegram community
_________________________________________