Stablecoin issuance in Kenya is a licensed activity supervised by the Central Bank of Kenya, not the Capital Markets Authority. Under the Virtual Asset Service Providers Act, 2025 (Act No. 20 of 2025), “Stablecoin Issuance” is one of the eleven virtual asset activities in the First Schedule, and it is one of the three heads assigned to CBK. No person may issue, or hold itself out as issuing, a stablecoin in or from Kenya without a CBK licence once the licensing channel opens. That channel is not open yet. The implementing Regulations are still in draft, CBK and CMA have jointly confirmed that no VASP has been licensed, and you cannot obtain a stablecoin issuance licence in Kenya today. The draft Virtual Asset Service Providers Regulations, 2026 propose the toughest terms in the whole regime for issuers: a minimum core capital of KES 500 million and a requirement to hold at least 30% of funds received in segregated accounts at Kenyan commercial banks. Those figures are draft and not yet gazetted. This guide covers what is already binding, what is still proposed, and what an issuer should do now.

Short answer

What counts as a stablecoin under Kenyan law?

The VASP Act defines “stablecoin” directly in section 2 as “a virtual asset designed to or that aims to have its value fixed or pegged relative to one or more reserve assets, including fiat currency, commodities, or other virtual assets, for the primary purpose of maintaining a stable value.” It also treats stablecoin issuance as a distinct, named activity in the First Schedule. The wider starting point is the general definition of a virtual asset in section 2: “a digital representation of value that can be digitally traded or transferred and can be used for payment or investment purposes and does not include digital representation of fiat currencies, securities and other financial assets.” A stablecoin sits inside that definition because it is a digitally transferable representation of value used for payment. It is not fiat itself, and it is not a central bank digital currency.

The line that matters for issuers is the carve-out in section 4. A digital representation of fiat currency issued by CBK or any other central bank is outside the Act entirely. That means a CBK-issued digital shilling, if one is ever launched, is not a stablecoin for these purposes. A privately issued token pegged to the shilling, the dollar or any basket of assets is a stablecoin and is caught.

For the full framework of which activities are licensed and by whom, see the pillar guide on VASP licensing in Kenya.

Who regulates stablecoin issuers in Kenya?

The Central Bank of Kenya. The VASP Act uses a dual-regulator model under section 5: the CMA supervises the markets rail and CBK supervises the payments rail. Stablecoin issuance sits on the payments rail, alongside custodial wallet provision and payment processing, all three of which CBK licenses.

That assignment has a practical consequence. A pure stablecoin issuer applies to CBK. But most real stablecoin businesses do more than mint and redeem. If your model also runs the on-chain transfer infrastructure, you may need a CBK payment processor licence on top. If it offers any conversion or exchange feature between your stablecoin and other virtual assets or fiat, that conversion function can pull in a CMA exchange licence as well. The Act licenses activities, not firms, so a multi-function stablecoin platform can need more than one licence from more than one regulator. We cover that mapping in the pillar and in VASP licence categories in Kenya.

Can you get a stablecoin issuance licence in Kenya right now?

No. This is the single most important point for any founder planning a Kenyan stablecoin.

The VASP Act commenced on 4 November 2025 and every Part of it is in force, including the prohibition on unlicensed operation. But the licensing channel itself sits behind subsidiary Regulations that the Cabinet Secretary for the National Treasury has not yet gazetted. On 18 November 2025, CBK and the CMA issued a joint public notice confirming that no VASP has been licensed and that licensing will only begin once the Regulations are issued. As of 30 June 2026, no Legal Notice making those Regulations has appeared on Kenya Law.

So there is nothing to apply on. Anyone marketing themselves today as a “CBK-licensed stablecoin issuer” is, on the regulators’ own joint notice, misrepresenting.

For the wider transitional clock and the 4 November 2026 deadline that incumbents are racing, see VASP compliance deadline in Kenya.

How much capital does a stablecoin issuer need?

The Act leaves the figures to Regulations. Section 22(1) requires every VASP to maintain its business in a financially sound condition “by complying with such capital, solvency and insurance requirements as may be prescribed”, and the Act expressly contemplates different figures for different activity types.

The draft Virtual Asset Service Providers Regulations, 2026, published for comment on 17 March 2026, propose the first concrete numbers. Minimum core capital is scaled by activity. It runs from about KES 2.5 million for an investment adviser up to KES 500 million for a stablecoin issuer, which is the top of the scale. A firm that holds more than one licence must hold separate paid-up capital for each licensed activity.

To be explicit: the KES 500 million stablecoin capital floor is DRAFT. It comes from the draft Regulations 2026 and the Regulatory Impact Statement circulated for public comment to 10 April 2026. No Legal Notice gazetting the Regulations has been published as of 30 June 2026. The figure may change before it becomes law. Do not rely on a specific shilling figure in a binding context, such as a board paper or an investor deck, until the Legal Notice is published.

For how capital scales across every VASP category, see Crypto capital requirements in Kenya.

What are the stablecoin reserve and segregation rules?

This is the heart of stablecoin-specific regulation and the part that separates an issuer from every other VASP.

The draft Regulations 2026 propose that stablecoin issuers hold at least 30% of funds received in segregated accounts at Kenyan commercial banks, with the remainder in low-risk Kenya-domiciled high-quality liquid assets. Two design choices are doing the work there. First, a minimum domestic-banking anchor: at least 30% of the float has to sit in Kenyan commercial bank accounts, ring-fenced from the issuer’s own money. Second, a domicile constraint on the rest: the remaining reserve cannot be parked in offshore instruments, it must be held in Kenya-domiciled high-quality liquid assets. The clear policy intent is to keep the backing assets onshore and inside the supervised Kenyan banking system.

That draft reserve rule sits on top of the binding segregation duty that is already law. Section 31 of the VASP Act, the omnibus client-asset provision, requires any VASP holding client virtual assets to keep a sufficient amount of each type of virtual asset to meet its obligations to customers, to segregate client holdings from its own and from other clients, and to keep client assets out of reach of the licensee’s own creditors. In plain terms: full one-to-one backing per token type, ring-fenced, and bankruptcy-remote. For a stablecoin issuer, that principle and the draft 30% rule have to be engineered into the reserve and account architecture from day one.

Label everything correctly: the 30% Kenyan-bank reserve and the Kenya-domiciled HQLA requirement are DRAFT and not yet gazetted. Section 31’s segregation and one-to-one backing duties are already in force.

What about redemption and attestation?

The draft Regulations are expected to set the detailed reserve composition, the redemption-at-par timelines and the attestation cadence for issuers. The pillar notes that these specifics, including detailed reserve composition, attestation cadence and redemption-at-par timelines, are delegated to Regulations and not yet finalised.

What an issuer should plan for, based on the direction of the draft and on how comparable regimes treat stablecoins:

Treat the exact redemption window and attestation frequency as open items until the Legal Notice is gazetted. The fixed points are: redeem at par, keep reserves segregated and fully backed, and stand up auditable real-time reporting.

The offshore-flight debate

The KES 500 million capital floor and the 30% onshore-reserve rule are the most contested figures in the draft. Industry groups have warned publicly that the stablecoin floor and the wider fee scale could push smaller Kenyan operators offshore. The argument is straightforward: a half-billion-shilling capital requirement is out of reach for most local startups, so the rule effectively reserves stablecoin issuance for banks, large fintechs and well-funded foreign entrants, and pushes everyone else to incorporate and issue from a lighter-touch jurisdiction while still serving Kenyan users.

The counter-argument is the policy one behind the draft. Stablecoins carry a run risk. If the peg breaks or the reserves are not really there, retail holders lose money and the failure can spill into the payment system. A high capital floor and an onshore, supervised reserve are the regulator’s tools for making sure a Kenyan-facing stablecoin is actually backed by assets it can reach and supervise.

For an issuer, the debate is not academic. It feeds directly into the structuring decision: license in Kenya at the full prudential cost, or issue offshore and accept the regulatory and reputational risk of serving Kenyan users from outside. Note the Act’s territorial reach. It catches services provided “in and from Kenya” and anyone who “holds itself out” as providing them to Kenyan users, so an offshore issuer that targets or onboards Kenyan customers is not automatically out of scope. We work through that trade-off with founders in Crypto business offshore vs Kenya.

What should a stablecoin issuer do now?

You cannot file yet, but the work that wins a licence and survives the transitional cliff is the work you do before the channel opens.

The incumbents’ clock is real. The one-year compliance window in section 47 closes on 4 November 2026, and as of 30 June 2026 the licensing channel is still not open. An issuer already serving Kenyan users has to either document a good-faith effort to comply and be first in the queue, or wind down the Kenyan-facing service before the window expires. Getting that call wrong carries the section 40(3) penalty: up to KES 25 million for the company, and up to KES 10 million or five years’ imprisonment for an individual.

Frequently asked questions

Who regulates stablecoins in Kenya? The Central Bank of Kenya. Stablecoin issuance is one of the three CBK-licensed activities under the VASP Act 2025, alongside custodial wallets and payment processors. The CMA regulates the markets-side activities such as exchanges and brokers.

Can I get a stablecoin licence in Kenya now? No. The VASP Act is in force, but the implementing Regulations are still in draft and no VASP has been licensed. CBK and the CMA confirmed jointly on 18 November 2025 that licensing starts only once the Regulations are gazetted. As of 30 June 2026, that has not happened.

How much capital does a stablecoin issuer need? The draft Regulations 2026 propose KES 500 million minimum core capital, the highest in the regime. That figure is draft and not yet gazetted, so it may change before it becomes law. The Act itself leaves capital figures to Regulations.

What is the reserve requirement? The draft Regulations propose that issuers hold at least 30% of funds received in segregated accounts at Kenyan commercial banks, with the remainder in low-risk Kenya-domiciled high-quality liquid assets. That is draft. Separately, the in-force section 31 already requires full one-to-one backing of client assets, segregation, and bankruptcy-remoteness.

Is a CBK digital shilling a stablecoin? No. Section 4 carves out any digital representation of fiat issued by CBK or another central bank. A central bank digital currency is outside the VASP Act. Only privately issued pegged tokens are stablecoins for these purposes.

Will the rules push Kenyan stablecoin issuers offshore? That is the live debate. Industry groups have warned that the KES 500 million floor and the fee scale could push smaller operators offshore. Note that the Act reaches services provided “in and from Kenya”, so issuing offshore does not automatically remove a Kenyan-facing issuer from scope.

Do I need other registrations on top of the CBK licence? Yes. Every VASP must also register as a reporting institution with the Financial Reporting Centre under POCAMLA and register as a data controller with the ODPC under the Data Protection Act. These are separate statutory obligations, not part of the CBK licence.

What happens if I issue a stablecoin without a licence? Section 8(2) prohibits carrying on, purporting to carry on, or holding out as carrying on virtual asset services without a licence. The penalty under section 40(3) is up to KES 25 million for a company, and up to KES 10 million or five years’ imprisonment for an individual. A director or senior officer who knowingly authorised, permitted or aided the contravention is personally liable too.

If you are planning a stablecoin issuance business aimed at Kenyan users, the time to scope your file is now, while the Regulations are being finalised, not after they are gazetted and your competitors are already in the queue. We work with founders, treasury teams and foreign groups on the full stack: corporate structuring, the reserve and segregation architecture, the licensing strategy across CBK and CMA, the AML and POCAMLA build-out, the ODPC registration, and the tax position. Book a consultation and we will scope your file.

Related reading: VASP licensing in Kenya, Crypto capital requirements in Kenya, Crypto business offshore vs Kenya, and Fintech lawyer Kenya.