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Treasury bans interest on stablecoins to protect bank deposits
Stablecoins are digital currencies whose value is tied to relatively stable assets, such as the US dollar or the Kenyan Shilling, to minimise the price swings common in cryptocurrencies.
The National Treasury has banned interest payments on stablecoins, regardless of how long they are held, a strategy aimed at preventing issuers from acting as unregulated banks.
In the final Virtual Asset Service Providers regulations published last week by the Treasury Cabinet Secretary John Mbadi, payment of interest on stablecoins by issuers and exchanges will be strictly prohibited, a deviation from the practice in more developed crypto markets like the US.
