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New rules set up to Sh500m capital for crypto firms
With high peer-to-peer (P2P) crypto transaction volumes, Kenya often ranks high globally and in Africa, driven by remittances and a strong mobile money base.
Cryptocurrency operators will need to maintain a minimum paid-up capital of up to Sh500 million under new regulations that will govern the trading of digital money in Kenya.
Entities falling under the regulations include stablecoin and tokenisation issuers, virtual asset exchanges and wallet providers, initial coin issuers, and virtual asset brokers, managers, investment advisers and payment processors.
The draft Virtual Asset Service Providers Regulations 2026, which the National Treasury has published, also requires the providers to maintain liquidity pegged to the size of liabilities.
The capital requirements, which also include reserves invested in low-risk assets, are meant to build safeguards for investors engaged in trading virtual assets.
Stablecoin issuers have been handed the steepest minimum paid-up capital requirements at Sh500 million, with their liquid capital set at Sh100 million, or 100 percent of current liabilities, whichever is higher.
Paid-up capital represents the fully paid-up ordinary shares of the company, while liquid capital is the amount by which the company’s current assets exceed its liabilities.
“Where a licensee intends to or has been authorised to carry out more than one virtual asset service, the licensee shall hold the amount of paid-up capital under this regulation for each licensed activity,” read the regulations in part.
“The relevant regulatory authority may require a licensee to increase the paid-up capital under this regulation, as it may deem necessary, depending on the risk profile of the virtual asset service.”
Issuers who offer initial coins, tokenisation (digital representation of an asset), and associated trading platforms will maintain a minimum capital of Sh200 million, and liquidity of at least Sh40 million.
Virtual asset wallet providers and exchanges will need a minimum capital of Sh150 million, while payment processors have a minimum threshold of Sh50 million.
The capital for brokers and asset managers has been pegged at Sh30 million, and investment advisers at Sh2.5 million.
These firms will also pay licence fees of between Sh100,000 and Sh2 million, which will be renewed annually at the same rates or 0.15 percent of gross turnover, whichever is higher.
The regulations— which are now undergoing public participation— are meant to implement the Virtual Assets Service Providers Act 2025, which became effective in November 2025.
The Act mandates the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA) jointly license, supervise, and regulate the virtual asset providers.
The legislation was introduced after the drafting of a national policy on virtual assets in 2024 by a multi-agency taskforce composed of the CBK, CMA and other regulators in response to the proliferation in use of virtual assets in recent years.
Kenya was ranked fifth globally in transactional use of cryptocurrencies, mainly underpinned by stablecoins, which are digital currencies that are convertible into traditional currencies such as the dollar on a 1:1 basis.
The country was only ranked behind Ukraine, the US, Nigeria and Vietnam in transactional crypto use according to the 2025 World Crypto Ranking report by global cryptocurrency exchange Bybit.
The report also noted that the Kenyan market has demonstrated its readiness to adopt cryptocurrencies, especially in retail transactions.
Due to the direct peg on actual currency, stablecoins are relatively stable, backing their use in merchant payments, remittances, and cross–border settlements.
With high peer-to-peer (P2P) crypto transaction volumes, Kenya often ranks high globally and in Africa, driven by remittances and a strong mobile money base.
Data from the New York-based analytics firm Chainalysis showed that the country made $3.3 billion (Sh427 billion) worth of stablecoin transactions in the 12 months to June 2024.
