Kenya’s Treasury Proposes 30% Stablecoin Bank Reserve

The National Treasury published a draft rule in July 2026 requiring stablecoin issuers to hold at least 30% of their reserves in dedicated accounts at Kenyan commercial banks. The requirement would apply to funds received for stablecoins issued in connection with platforms operating in Kenya.

Treasury officials argue the local-reserve requirement would protect the domestic financial system from volatility in digital asset markets, provide Kenyan investors with access to local liquidity and reduce exposure if an issuer fails.

Cryptocurrency exchanges and other digital-asset firms counter that parking a significant share of reserves in local banks could trap liquidity, reduce funds available for on- and off-ramps, slow transaction processing and increase costs for customers using stablecoins for remittances and cross-border trade. Industry representatives say global platforms typically manage reserves across multiple jurisdictions and that concentrated local holdings would raise operational costs.

Industry groups have requested continued consultations with the Treasury and other regulators through 2026 to clarify compliance costs, reporting standards, audit processes and custodial arrangements. They have raised technical concerns about how the mandate would be enforced and audited and whether commercial banks can handle crypto-related deposits without adding fees or causing delays.

The draft calls for dedicated bank accounts to hold the mandated reserves. Regulators have not set a deadline to finalise the rules. Banks have not publicly confirmed whether they will accept the deposits or what terms they would require.

Kenya receives significant remittances and relies on cross-border payments for trade. Market participants warn that higher bank charges or reduced liquidity could raise the cost of converting stablecoins into Kenyan shillings and make digital remittances less competitive, potentially affecting low-income senders and recipients.

Stablecoins are digital tokens typically pegged to a fiat currency and backed by reserves such as cash or short-term government securities. Regulators in other countries have adopted a range of approaches, including reserve requirements, custodial rules and licensing regimes for issuers and custodians.

Negotiations between the Treasury and industry stakeholders are ongoing as both sides work to address local access to liquidity, enforcement and operational issues.