NAIROBI, April 10 – Kenya is proposing strict new rules for stablecoin issuers, requiring firms to hold significant capital and keep a portion of customer reserves within the domestic financial system under draft regulations released for public consultation.
The National Treasury’s proposed Virtual Asset Service Providers Regulations set a minimum paid-up capital requirement of KES 500 million ($3.85 million) for issuers.
In addition, firms must maintain core or liquid capital of at least KES 100 million ($773,700) or 100% of their liabilities over a 30-day period, whichever is higher.
Under the draft, all stablecoins issued to the public must be fully backed by reserves held in high-quality liquid assets. At least 30% of those reserves must be deposited in segregated accounts at commercial banks domiciled in Kenya, while the remainder can be held in cash or short-term government securities with maturities of 90 days or less.
The framework also requires that reserves remain separate from company funds, free of third-party claims, and available for immediate redemption at par value. Issuers are prohibited from offering interest or any form of yield on stablecoins, including indirect returns through affiliated platforms.
To strengthen oversight, the draft introduces mandatory proof-of-reserve checks, annual independent audits, and strict disclosure requirements. Company boards will be held accountable for the accuracy of filings, while issuers must clearly state that stablecoins are not covered by investor compensation schemes.
A multi-agency coordination committee, led by the National Treasury and including financial, intelligence, and enforcement bodies, will oversee supervision and enforcement across the sector.
