Kenya Cracks Down on Stablecoin Reserves with 30% Local Requirement

Kenya has introduced regulations for stablecoins, forcing issuers to hold at least 30% of their reserves in segregated accounts within Kenyan commercial banks. This move is part of a broader global trend towards stricter regulation of digital assets.

The new rules aim to address concerns that stablecoins, pegged largely to the US dollar, could draw massive deposits away from local banks and weaken financial systems in emerging markets.

Industry players have expressed resistance to the requirement for local reserves, citing additional costs and complexity. However, regulators argue that this measure ensures stability and accountability within the financial system.

The regulations are part of a multi-year policy shift in Kenya, which has moved from a cautious stance on crypto to a more structured framework for licensing and supervision.