CBK Unveils Tough New Crypto Rules as Firms Face Sh1.5 Billion Capital Hurdle
Kenya has tightened its grip on the rapidly expanding cryptocurrency industry, with new regulations imposing hefty capital, liquidity and consumer-protection requirements on virtual asset businesses.
The Central Bank of Kenya (CBK) has introduced a tougher regulatory regime for virtual asset service providers, setting new financial requirements for cryptocurrency firms and placing stablecoin issuers under closer scrutiny.
The regulations, contained in Legal Notice No. 134 of 2026, establish a licensing and supervisory framework for virtual asset businesses operating in Kenya.
Among the most significant measures is a requirement for stablecoin issuers to maintain a minimum paid-up capital of KSh300 million before commencing operations.
The firms must also maintain liquid capital of at least KSh60 million or an amount equivalent to 100 per cent of their current liabilities for a minimum of 30 days, whichever is higher.
The rules represent a major shift for Kenya’s cryptocurrency industry, which has operated for years in a regulatory environment that left consumers and businesses facing uncertainty over the rules governing digital assets.
Crypto firms face new financial demands
Virtual asset wallet providers will be required to maintain minimum paid-up capital of KSh150 million, while virtual asset exchanges must have at least KSh100 million in paid-up capital.
Exchanges will additionally be required to maintain liquid capital of at least KSh20 million or eight per cent of their total liabilities, whichever is higher.
Businesses facilitating Initial Coin Offerings (ICOs) will also face capital requirements, with the regulations setting a minimum paid-up capital of KSh20 million and liquid capital of at least KSh4 million or eight per cent of total liabilities, whichever is higher.
The requirements are designed to ensure that companies handling digital assets have sufficient financial strength to meet their obligations and withstand potential market shocks.
Stablecoin issuers placed under CBK scrutiny
Stablecoin businesses face some of the most demanding requirements under the new framework.
Before beginning operations in Kenya, issuers must obtain approval from the CBK.
They must also ensure that their stablecoins are fully backed by reserve assets whose value remains equal to or greater than the nominal value of all outstanding stablecoins.
The regulations further require issuers to conduct quarterly stress tests of their reserve assets and submit the results to the CBK for review.
Stablecoin issuers must also establish clear redemption policies setting out consumers’ rights, including the conditions, thresholds and timelines applicable when holders seek to redeem their assets.
The measures are intended to reduce the risk of consumers being unable to recover the value of their holdings during periods of financial stress.
Kenya moves to close crypto regulatory gaps
The new framework follows the enactment of the Virtual Asset Service Providers Act, 2025, which created the legislative foundation for regulating the sector. The National Treasury subsequently developed detailed regulations through a multi-agency process involving the CBK and Capital Markets Authority (CMA).
The regulations divide responsibility between Kenya’s financial regulators, with the CBK playing a central role in areas involving stablecoins and virtual asset-to-fiat conversion, while the CMA oversees areas including exchanges, ICOs and tokenisation activities.
The government has argued that regulation is necessary to create a safer and more predictable environment while addressing risks associated with money laundering, fraud, cybercrime and consumer losses.
The National Treasury’s regulatory impact assessment said the objective was to establish a “safe, transparent, and innovative regulatory environment” for virtual assets.
That objective could now face its biggest test as businesses adjust to the financial and operational demands imposed by the new regime.
What the new rules mean for crypto users
For ordinary cryptocurrency users, the regulations could bring greater scrutiny and stronger safeguards to an industry that has grown rapidly among Kenya’s young, technology-oriented population.
The framework also introduces broader requirements covering areas such as governance, customer due diligence, cybersecurity, advertising, asset protection and reporting.
The government has previously highlighted concerns about the risks posed by unregulated virtual asset businesses, including fraud, consumer losses, money laundering and financial instability.
Kenya’s decision comes as digital assets become increasingly embedded in the country’s financial and technology ecosystem.
The country is widely regarded as one of Africa’s important digital-finance markets, helped by its widespread mobile-money adoption and large young population.
The new rules are therefore likely to have consequences far beyond crypto exchanges, potentially affecting companies involved in digital wallets, stablecoins, token offerings and other blockchain-based financial services.
A new era for Kenya’s crypto market
For the government, the regulations could provide the legal certainty needed to attract serious investment while protecting consumers.
For smaller crypto businesses, however, the tougher capital and compliance requirements could prove considerably more challenging.
The National Treasury’s earlier consultation on the draft regulations attracted concerns from industry participants about whether high capital requirements could make it difficult for smaller Kenyan firms to compete with larger international operators.
With the framework now moving into implementation, the Kenyan crypto market is entering a new phase.
The message from regulators is increasingly clear: cryptocurrency businesses may continue to grow in Kenya—but they will have to do so under much stricter financial and regulatory controls.
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