Kenya Lowers Stablecoin Issuer Capital Requirement to $2.32 Million

Lower entry threshold

The new threshold is 40% below the nearly $3.9 million level set out in draft rules published last March. The National Treasury’s move is described as an effort to encourage entry into Kenya’s fast-growing crypto market.

Even with the lower capital hurdle, the framework keeps a substantial compliance burden for firms seeking to issue stablecoins in the country. The rules sit within a broader regime that continues to give the Central Bank of Kenya extensive powers over stablecoin issuers and other virtual asset service providers.

Broad central bank powers

Under the framework, the central bank retains authority to act against offshore-issued tokens by directing local platforms to stop offering them. That power signals that Kenya is trying to shape the local market not only through licensing and capital standards, but also through control over which digital assets can be distributed through domestic channels.

The revised rules also set out licensing costs. Stablecoin issuers face an application fee of $772 and a license fee of more than $15,400, which is four times the wallet provider fee.

Reserve and liquidity rules

The framework requires every stablecoin to be backed 1-to-1 by eligible reserve assets. Those reserves must be legally separated from company funds, a measure aimed at protecting users if an issuer runs into financial trouble.

For fiat-backed stablecoins, reserves must be held in the same currency as the token’s peg. In addition, at least 30% of customer funds must be kept in segregated trust accounts, while the remainder may be invested in eligible domestic assets.

Issuers must also meet a separate liquid capital requirement of $463,320 or 100% of current liabilities, whichever is higher. Wallet providers, meanwhile, must hold $231,660 or the equivalent of all current liabilities for at least 30 days.

Operating restrictions and reporting

Kenya’s rules also limit how stablecoins can be marketed and used. Issuers are barred from offering interest or rewards tied to holding stablecoins, meaning competition is expected to center on payment and settlement efficiency rather than yield.

Ongoing oversight requirements are detailed. Issuers must conduct quarterly stress tests and file monthly reports covering reserves and transactions. They must also redeem stablecoins at face value within two business days.

These provisions indicate that while Kenya has lowered the cost of entry compared with the original draft, it is still insisting on strong reserve management, operational resilience, and close supervision.

The revised capital threshold appears to mark a balancing act: lowering one of the biggest barriers for prospective issuers while preserving extensive safeguards and broad intervention powers for regulators as global stablecoin firms weigh whether to enter the Kenyan market.