Kenya proposes strict stablecoin regulations with high capital requirements

Kenya's National Treasury published draft Virtual Asset Service Providers Regulations in March, requiring stablecoin issuers to hold local fiat-backed reserves in high-quality liquid assets at all times. At least 30% of customer funds must sit in segregated accounts at Kenyan commercial banks, with the remainder in cash or government securities with 90-day maturities. Issuers must maintain KES 500 million ($3.85 million) in paid-up capital and are banned from paying interest or yield on stablecoins. The rules establish a 13-member Coordination Committee chaired by the Treasury to supervise virtual asset service providers, with members from CBK, CMA, DCI, and 10 other agencies. Current Kenyan stablecoin supply is tiny at KES 18.8 million ($145k), but these regulations could set a precedent for other African countries including Nigeria. The rules mirror US and EU approaches but go further by tying reserves specifically to Kenyan banks and banning yield completely. This trade-off prioritizes safety over innovation, potentially pushing smaller issuers out of the market while protecting users from losses tied to reserve management risks.

SOURCE: https://techcabal.com/2026/04/09/kenyan-stablecoin-reserves-in-local-banks/