Kenya stablecoin issuer licence: the KES 300m question
Kenya's virtual asset regime sets out ten activity categories, and stablecoin issuance carries by far the heaviest entry requirement. The headline number reported across Kenyan coverage of the Virtual Asset Service Providers Regulations, 2026 (Legal Notice No. 134 of 2026) is KES 300 million of paid-up capital. That figure is real, but it is not the constraint that decides whether an issuer can operate.
The regulator is the Central Bank
The Virtual Asset Service Providers Act, 2025 (Act No. 20 of 2025) splits supervision between two authorities. The Central Bank of Kenya takes custodial wallet providers, virtual asset payment processors and stablecoin issuers. The Capital Markets Authority takes exchanges, brokers, virtual asset advisers and managers, ICO providers, tokenisation providers and token issuance platforms. A stablecoin issuer therefore deals with CBK, and should expect a banking-supervision posture rather than a markets-conduct one.
What KES 300 million buys you
The capital and liquidity requirements sit in the Fifth Schedule to Legal Notice 134. The reported figures for stablecoin issuance are KES 300 million in paid-up capital, plus a liquid capital requirement of KES 60 million or 100% of current liabilities for at least 30 days, whichever is higher. The second limb is the one that scales: for an issuer of any real size, the 30-day liability cover rather than the KES 60 million floor is likely to bind.
For context, the same schedule sets KES 150 million for wallet and custodial providers, KES 100 million for exchanges, KES 20 million for ICO providers and token issuance platforms, and KES 10 million for tokenisation providers and brokers. Stablecoin issuance is deliberately set apart from the rest of the framework.
The final figures also moved. The draft regulations published by the National Treasury earlier in 2026 proposed KES 500 million paid-up and KES 100 million liquid capital for stablecoin issuers; both were cut in the gazetted text. Any planning document built on the draft needs rechecking against the notice as published.
The reserve rules are the real gate
Capital is a one-off. The reserve obligations are continuous, and they are where most business models either break or hold. The regulations require the value of reserve assets to be at all times at least equal to the nominal value of outstanding stablecoin units — full backing, not fractional. Reserve assets must be segregated from the issuer's own operating assets and from the reserves of any other stablecoin.
The provision that has attracted the most attention is localisation: at least 30% of funds received must be held in segregated accounts with commercial banks in Kenya, with the remainder invested in secure, low-risk high quality liquid assets in Kenya, and reserves for a fiat-referenced stablecoin denominated in the currency the coin is pegged to. For an issuer of a dollar-referenced coin, that is a material constraint on treasury design, and it should be modelled before anything else in the application.
That rule is not politically settled. The National Assembly committee responsible for delegated legislation has questioned the 30% requirement and flagged inconsistencies in the redemption provisions. A legal notice remains subject to parliamentary scrutiny, so an issuer building to the current text should track that process rather than assume it is final.
No yield, and redemption at par
The regulations prohibit paying interest or any time-based remuneration on stablecoin holdings, including arrangements with an effect equivalent to interest such as net compensation or discounts. That closes off the most obvious revenue model and pushes issuers towards reserve income and transaction fees.
Holders have a right of redemption at par value. Because the parliamentary committee has raised concerns about conflicting redemption language in the notice, confirm the operative wording — in particular any settlement timeframe — against the gazetted text before publishing redemption terms to customers.
Reporting, and what not to assume
Issuers face continuing disclosure of the amount in circulation and the value and composition of reserves, independent examination of reserves by an approved auditor, and periodic reporting to CBK. The draft regulations set monthly attestation and publication cycles with a short filing window after each period; the frequencies in the gazetted notice should be confirmed directly rather than taken from any summary.
Two things not to assume. Applicants must be incorporated in Kenya, or be a foreign company holding a certificate of compliance with a physical presence in Kenya, but nothing published imposes a residency requirement on individual directors or officers. And licence and renewal fees changed materially between draft and final across other categories, so do not price an application off the draft fee schedule.
The clock
Section 47 of the Act gives providers that were operating when the Act commenced on 4 November 2025 one year to comply, so the deadline is 4 November 2026. Legal Notice 134 was published only in late July 2026. As at early August 2026 neither CBK nor CMA had licensed any provider under the Act, so no applicant has yet been through the process end to end, and there is no published guidance on the position of a firm that files in time but is not licensed by the deadline.
If you are working towards a stablecoin licence, build the reserve and treasury structure first. It has the longest lead time, it is the part CBK is least likely to negotiate, and it is the part a KES 300 million balance sheet does not solve on its own.
The checklist behind this article
Everything above is drawn from the same working document I use when I read a file: an 11-page readiness checklist for VASP licensing in Kenya, covering the CBK/CMA split by activity, the full paid-up capital table from the Fifth Schedule to Legal Notice 134, the stablecoin liquid-capital test, the evidence trail that has to exist before you file, the fee schedule, and the points that are still genuinely open. Every figure is marked with whether it comes from the instrument or from reporting of it — because planning against a secondary figure is sensible and capitalising against one is not. It is USD 79, and buyers get the updated edition free when the application window opens.
If your situation is straightforward, the checklist is genuinely enough and you will not need to speak to me. If it is not, the 48-hour gap check reads what you have and returns a written list of what is missing, in the order it should be fixed.