Kenyan Treasury Pushes 30% Reserve Requirement as Stablecoin Firms Warn of Higher Costs
Kenya’s National Treasury and cryptocurrency exchanges are locked in a standoff over a proposed regulation that would force stablecoin issuers to hold at least 30% of their asset reserves in local commercial banks. The rule, aimed at insulating Kenya’s financial ecosystem from digital asset volatility and protecting local investors, requires crypto exchanges to deposit a significant portion of funds received for stablecoins into dedicated accounts in Kenyan banks.
Industry representatives argue that the 30% local reserve mandate is too restrictive and clashes with the decentralized nature of global crypto platforms. They warn that locking up nearly a third of reserves in Kenyan commercial banks could choke operational liquidity, slow transaction speeds, and increase costs for consumers using stablecoins for cross-border trade and remittances.
The dispute comes amid an ongoing push by Kenyan regulators to bring the growing digital asset sector under formal oversight. While the Treasury views the local banking buffer as a necessary guardrail against potential consumer losses, crypto platforms contend that alternative global custodial frameworks are better suited to manage stablecoin stability.
No deadline has been finalized for the draft rules as consultations between state financial regulators and sector stakeholders continue. Crypto industry leaders in Kenya are pushing for continued engagement, stating that a collaborative approach is necessary to balance investor protection with sector growth.