Members of the National Assembly’s Committee on Delegated Legislation have raised concerns over provisions contained in draft digital asset finance regulations prepared by the National Treasury.
They pointed out that some requirements could create uncertainty for operators and undermine the competitiveness of a sector that policymakers have spent the past year trying to bring into the formal financial system.
The concerns come just months after the draft Virtual Asset Service Providers Regulations were unveiled, following the assent of the VASP Act last year.
Lawmakers focused much of their scrutiny on a proposal requiring stablecoin issuers to maintain 30% of their reserves in local banks.
According to the framework, virtual assets are under a dual regulatory structure, with the Central Bank of Kenya (CBK) overseeing payment processors, wallet providers and stablecoin issuers, while the Capital Markets Authority (CMA) supervises exchanges, tokenization platforms and other investment-related activities.
The draft rules already impose some of the highest entry thresholds in the market including minimum capital requirements of KSh500 million for stablecoin issuers, KSh150 million for exchanges and wallet providers, and KSh200 million for tokenization and initial coin offering platforms.