Kenyan Treasury Pushes 30% Reserve Requirement as Stablecoin Firms Warn of Higher Costs
Kenya’s National Treasury and cryptocurrency exchanges are in a standoff over a proposed regulation requiring stablecoin issuers to hold at least 30% of their asset reserves in local commercial banks. Key. . .
Kenya’s National Treasury and cryptocurrency exchanges are in a standoff over a proposed regulation requiring stablecoin issuers to hold at least 30% of their asset reserves in local commercial banks. Key TakeawaysKenya’s National Treasury proposed a mandate forcing stablecoin issuers to hold 30% of reserves in local banks. Crypto platforms warn the rule could trap liquidity and increase remittance costs across Kenya. Industry leaders seek to continue 2026 talks with regulators to balance user protection with sector growth. Protecting the Local MarketCryptocurrencyexchanges and Kenya’s National Treasury are reportedly locked in a standoff over a proposed regulation that would forcestablecoinissuers to hold a significant portion of their reserves in local banks. According to areport, the rule requirescryptoexchanges to hold at least 30% of all funds received forstablecoinsissued in dedicated accounts across commercial banks in Kenya. The Treasury’s proposal is said to be aimed at insulating Kenya’s financial ecosystem from thevolatilityof the digital asset markets,protecting local investors, and ensuring thatstablecoinsoperating within the country have concrete, domesticliquidity. However, digital currency players argue the 30% local reserve mandate is too restrictive and clashes with the decentralized nature of globalcryptoplatforms. Industry representatives warn that locking up nearly a third of their reserves in Kenyan commercial banks could choke operationalliquidity, slow transaction speeds, and increase costs for consumers who usestablecoinsfor cross-border trade and remittances. The dispute comes amid an ongoing push by Kenyan regulators to bring the rapidly growing digital asset sector into the formalregulatory fold. While the National Treasury views the local banking buffer as a necessary guardrail against potential consumer losses,cryptoplatforms contend that alternative global custodial frameworks are better suited to managestablecoinstability. The standoff has not halted discussions. Cryptoindustry leaders in Kenya are pushing for continued engagement with regulators, stating that a collaborative approach is necessary to balance investor protection with sector growth. No deadline has been finalized for the draft rules as consultations between state financial regulators and sector stakeholders continue.