Broad Oversight for Central Bank
Kenya has reduced the minimum paid-up capital required for stablecoin issuers by 40% to about $2.32 million (300 million Kenyan shillings). The revised threshold, published by the National Treasury, marks a significant shift from the nearly $3.9 million proposed in draft rules last March.
However, the Kenyan government retained strict oversight measures aimed at protecting investors as cryptocurrency adoption accelerates in the East African nation. Kenya ranked fifth globally in crypto adoption in Bybit’s 2025 World Crypto Ranking, with stablecoins driving cross-border payments and serving as a hedge against currency volatility in a market that processed tens of billions of dollars in 2024.
Under the new rules, the Central Bank of Kenya holds sweeping authority over stablecoin issuers and other virtual asset service providers. The powers allow the regulator to curb the circulation of offshore-issued tokens by compelling local platforms to stop offering them.
The framework also maintains strict reserve requirements. At least 30% of customer funds must be held in segregated trust accounts at Kenyan commercial banks, with the remainder invested in eligible domestic assets. Fiat-backed stablecoins must hold reserves in the same currency as their peg.
Parliament’s Committee on Delegated Legislation had pushed to relax the local investment rule, warning it could deter global issuers, but the Treasury kept the provision — a move that could increase deposits at Kenyan commercial banks if foreign firms seek local licensing.
Financial obligations differ across operators. Both stablecoin issuers and wallet providers must pay a $772 application fee, but issuers require $2.32 million in paid-up capital compared to $1.16 million for wallet providers. Issuers will pay over $15,400 for a license fee, four times the $3,860 fee charged to wallet providers.
Additionally, issuers must maintain $463,320 in liquid capital or 100% of current liabilities, whichever is higher. Wallet providers must hold $231,660 or the equivalent of all current liabilities for at least 30 consecutive days.
The regulations prohibit interest or rewards tied to how long customers hold stablecoins, effectively banning yield-like incentives such as loyalty bonuses. Issuers will instead compete on payment and settlement efficiency.
To strengthen consumer protection, every stablecoin must be fully backed on a 1-to-1 basis by eligible reserve assets, including cash, bank deposits, short-term government securities, and other central bank-approved instruments. Reserve assets must be legally separated from company funds and shielded from creditors in case of insolvency. Issuers must conduct quarterly stress tests, file monthly reserve and transaction reports, and ensure customers can redeem tokens at face value within two business days.
