TLDR
- Kenya’s National Treasury released draft VASP rules and opened them for public comment until April 10.
- The 2026 Regulations operate under the Virtual Asset Service Providers Act that took effect on Nov. 4, 2025.
- The draft requires stablecoin issuers to hold at least 30% of funds in segregated Kenyan bank accounts.
- Issuers must invest remaining reserves in cash, central bank deposits, or short-term government securities.
- Token issuance platforms will charge a 0.05% transaction fee payable by each counterparty.
Kenya’s National Treasury has issued draft operational rules for virtual asset firms and opened them for public comment. The proposal sets licensing, reserve, disclosure, and audit standards under the Virtual Asset Service Providers Act. Authorities will accept submissions until April 10, according to a government notice.
The 2026 Regulations take effect under the law that commenced on Nov. 4, 2025. The Treasury released a regulatory impact statement alongside the draft text. Officials said they developed the rules through a multi-agency task force.
The task force consulted the Central Bank of Kenya and the Capital Markets Authority. The process followed Kenya’s February 2024 grey listing by the Financial Action Task Force. The FATF cited gaps in anti-money laundering and counter-terrorism financing controls.
Kenya VASP Rules Outline Licensing and Oversight Framework
The draft expands eligibility for licenses to include limited liability partnerships. Earlier versions limited applications to companies. The regulator will have 90 days to respond to applicants.
License validity will run for 12 months from the date of issuance. The prior framework tied validity to a Dec. 31 expiration. The draft also requires every provider to open and operate a bank account in Kenya.
The proposal broadens the definition of a virtual asset. It includes a “digital representation of value” that represents real-world assets on blockchain or other technology. The text covers assets “whether cryptographically-secured or otherwise.”
The draft expands the definition of an issuer. It covers any natural or legal person who creates or makes crypto-assets available to the public. This scope applies to initial offerings and later issuance mechanisms.
The regulations require system audits every two years. Certified IT auditors must assess infrastructure, data security, and transaction integrity. Auditors will also review cybersecurity preparedness and operational resilience.
Stablecoin Backing and Fees Under Kenya VASP Rules
The draft sets reserve requirements for stablecoin issuers. Issuers must hold at least 30% of received funds in segregated accounts at Kenyan commercial banks. They must invest remaining reserves in secure, low-risk domestic assets.
Eligible reserve assets include cash and central bank reserve deposits. The list also covers bank deposits and government securities with a residual maturity of 90 days or less. Repurchase agreements must mature within seven days and use cash or central bank deposits as backing.
Local journalist Julians Amboko reported the reserve details. He cited provisions that restrict backing assets to high-quality liquid assets. The draft links compliance to domestic custody and liquidity standards.
The proposal introduces transaction-based fees for digital asset platforms. Token issuance platforms will charge a 0.05% fee payable by each counterparty. Initial virtual asset offerings will incur a 0.5% levy on the value of a successful offer.