Kenya has drawn a hard line for anyone wanting to run a crypto business within its borders.
The Central Bank of Kenya has gazetted new rules requiring virtual asset firms, from stablecoin issuers to token exchanges, to hold specific amounts of capital before they can legally operate, closing the final gap in a regulatory framework that has been years in the making.
The rules arrive through Legal Notice No. 134 of 2026, published in the Kenya Gazette Supplement on 22 July. They complete the licensing and operating framework for virtual asset service providers, giving Kenya’s crypto sector a clear rulebook after more than a decade of operating largely outside formal oversight.
Why This Matters Now
Kenya sits among Africa’s fastest growing cryptocurrency markets, powered by widespread mobile money use and a young, digitally fluent population. The government estimates Kenyans hold roughly KES 155 trillion, about USD 1.2 trillion, in virtual assets. That scale of exposure, sitting for years without dedicated rules, had regulators worried about consumer protection, financial stability and the risk of the sector being used to move illicit funds.
The new regulations aim to close that gap, giving businesses a predictable environment to operate in while giving consumers clearer protections if something goes wrong.
How Kenya Got Here
The rules gazetted this month are the final step in a process that has moved steadily since 2024, when the National Treasury first floated a draft national policy on virtual assets. Parliament passed the Virtual Asset Service Providers Act in October 2025, and President William Ruto signed it into law that same month. The Act came into force on 4 November 2025, formally bringing digital assets under statutory regulation in Kenya for the first time, though licensing could not begin until implementing regulations were finalised.
Table: Kenya’s Path to Crypto Regulation
| Milestone | Date | Detail |
|---|---|---|
| Draft National Policy on Virtual Assets | 2024 | National Treasury’s first formal policy proposal on digital assets |
| VASP Bill passed by Parliament | October 2025 | First substantive legislation governing the sector |
| Presidential assent | October 2025 | President William Ruto signs the VASP Act into law |
| Act comes into force | 4 November 2025 | Digital assets formally brought under statutory regulation |
| Public consultation on draft regulations | March 2026 | National Treasury, CBK and CMA seek public feedback ahead of an April deadline |
| VASP Regulations gazetted | 22 July 2026 | Legal Notice No. 134 completes the licensing framework |
Two regulators will split oversight duties. The Central Bank of Kenya will supervise stablecoin issuers and payment related crypto firms, while the Capital Markets Authority will license and monitor exchanges, brokers and tokenisation platforms. The Cabinet Secretary for the National Treasury retains power to bring in additional agencies and issue further guidelines as the sector evolves.
Capital Requirements by Business Type
The regulations set out minimum paid up capital and liquid capital thresholds that scale with the risk profile of each type of virtual asset business. Stablecoin issuers face the steepest bar, reflecting the systemic risk regulators associate with assets designed to hold a stable value and function similarly to money.
Table: Minimum Capital Requirements Under the VASP Regulations, 2026
| Provider Type | Minimum Paid Up Capital | Minimum Liquid Capital |
|---|---|---|
| Virtual Asset Offering / Stablecoin Issuance | KES 300 million | KES 60 million, or 100% of current liabilities for at least 30 days, whichever is higher |
| Virtual Asset Wallet Provider | KES 150 million | KES 30 million, or 100% of current liabilities for at least 30 days, whichever is higher |
| Virtual Asset Exchange Provider | KES 100 million | KES 20 million, or 8% of total liabilities, whichever is higher |
| Virtual Asset Offering / Initial Coin Offering | KES 20 million | KES 4 million, or 8% of total liabilities, whichever is higher |
The tiered structure signals a deliberate choice by regulators to let smaller, lower risk operators, such as ICO providers, enter the market with a modest capital base, while reserving the heaviest requirements for firms whose products could pose systemic or consumer protection risks if they fail.
Stablecoin Issuers Face the Toughest Scrutiny
Stablecoins, digital tokens designed to track the value of a fiat currency or other stable asset, are treated as the highest risk category under the new framework. Any company wanting to issue one in Kenya must first secure approval from the Central Bank of Kenya, and cannot proceed without it.
Beyond that initial approval, issuers must meet a detailed set of ongoing obligations designed to protect holders and preserve confidence in the token’s value:
- Full backing at all times. The value of an issuer’s reserve assets must never fall below the nominal value of all stablecoins in circulation.
- Restricted reserve assets. Reserves are limited to cash, including CBK reserves and bank deposits, short dated government paper maturing in under 90 days, and cash backed repurchase agreements maturing in under seven days.
- Segregated trust accounts. At least 30% of funds raised through a stablecoin issuance must sit in trust accounts at commercial banks in Kenya, ring fenced for processing issuance and redemption activity.
- Quarterly stress testing. Issuers must stress test their reserve assets every quarter and report results to the CBK.
- Clear redemption rights. Issuers must publish a policy spelling out how, when and under what thresholds consumers can redeem their holdings.
- Segregated reserves for multiple tokens. Firms issuing more than one stablecoin must keep separate, independently managed reserve pools for each token rather than pooling them together.
- Regulator approval for redemption fees. Any fee charged for redeeming a stablecoin needs CBK sign off before it can be applied.
Taken together, these provisions echo global regulatory trends for stablecoins, which have drawn increasing scrutiny from central banks worldwide after episodes where inadequately backed tokens lost their peg and wiped out holder value.
What Comes Next for Kenya’s Crypto Sector
For crypto businesses already operating in Kenya, the message is straightforward: formalise or step aside. Firms will need to demonstrate they meet these capital thresholds before regulators grant a licence, and stablecoin issuers in particular will need to build out compliance infrastructure, from trust account arrangements to quarterly stress testing, that many smaller operators have never had to maintain.
The regulations won’t eliminate all uncertainty in Kenya’s crypto market overnight. But they do give businesses, investors and consumers something they have lacked for over a decade: a clear, published rulebook for what it takes to operate legally in one of Africa’s largest digital asset markets.
