Kenya’s government proposed strict new rules for companies offering digital asset services, demanding that some hold as much as Sh500 million ($3.8 million) in capital. The measures are part of draft regulations under the Virtual Asset Service Providers (VASP) Act, 2025, which aims to bring oversight to the fast‑growing crypto market.

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Stablecoin Issuers Face Steep Capital Needs

According to the National Treasury’s draft, stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Read this Term issuers will face the highest requirement at Sh500 million ($3.8 million), while investment advisors will need at least Sh2.5 million ($19,300). The rules also exclude capital raised through loans or internal revaluations, requiring firms to use fully paid‑up funds only.

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The regulations emphasize that companies must maintain sufficient capital “commensurate with the scale, risk and complexity” of their operations. Regulators may also direct firms to raise capital further if their risk exposure increases.

Firms will also pay license fees between Sh100,000 ($772) and Sh2 million ($15,400), depending on the service type. Crypto exchanges and payment processors issuing stablecoins will pay the most.

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Applicants must submit detailed business plans showing their activities, technology, data protection, and anti‑money laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term measures, as well as three‑ to five‑year financial projections.

The draft follows the enactment of the VASP Act in November 2025 and involves collaboration among the National Treasury, Central Bank of Kenya, and Capital Markets Authority, signaling the country’s firm stance on cryptocurrency oversight.

Kenya’s Crypto Firms' Regulations

Kenya’s proposed capital and licensing rules sit on top of the Virtual Asset Service Providers (VASP) Act, 2025, the country’s first comprehensive crypto law that pulls exchanges, wallet providers and stablecoin issuers into a formal regime overseen jointly by the Central Bank of Kenya and the Capital Markets Authority.

Enacted in November 2025, the Act requires VASPs to be locally incorporated or registered, pass “fit and proper” tests and implement full AML/CFT controls aligned with FATF standards, including strict KYC, transaction monitoring and suspicious‑activity reporting to the Financial Reporting Centre, with criminal penalties and hefty fines for those operating without a license or breaching the rules.

Meanwhile, Kenya’s markets watchdog recently moved to license robo-advisors and intermediary trading apps, widening its net over online investing as global FX brokers like Capital.com and XM shift into its onshore regime.