Virtual assets providers have clashed with the National Treasury over a proposal to keep 30 percent of funds raised from stablecoin issuances in local commercial banks.
The firms want the requirement struck out for foreign-issued stablecoins, which are likely to face a similar rule in their host countries (country of issuance).
The firms have found support from the National Assembly Committee on Delegated Legislation, which sees the rule as a hurdle discouraging international operators from entering the Kenyan market.
The local virtual assets providers want amendments to spare foreign-issued stablecoins from the rule to avoid regulatory duplication.
“The focus of the requirement should be on Kenya Shilling-based stablecoins and not the localisation of foreign-issued stablecoins.”
The Virtual Asset Service Providers Regulations of 2026, which are currently under scrutiny by Parliament, seek to effect the Virtual Asset Service Providers Act, adopted last year, and which provides a legal base for the operations of players in the sector.
The rule requires that at least 30 percent of funds received by an exchange for stablecoins be held in accounts at commercial banks in Kenya.
An issuer of stablecoins and any other type of cryptocurrency is required to have Sh200 million in paid-up capital and Sh40 million in liquid capital or eight percent of its total liabilities.
Virtual assets providers will be required to abide by high capital and liquidity requirements to operate in Kenya as the National Treasury eyes stability for the emerging asset class.