The Treasury has reduced the minimum capital requirements for cryptocurrency companies by up to 40 percent, responding to industry concerns that the initial high thresholds would discourage investment.

Under new regulations issued by Treasury Cabinet Secretary John Mbadi, crypto operators must now maintain a minimum paid-up capital of Sh300 million, down from the previously proposed Sh500 million.

Revised Capital and Liquidity Requirements

  • Stablecoin issuers face a minimum paid-up capital of Sh300 million and liquid capital of Sh60 million or 100% of current liabilities for at least 30 days, reduced from Sh500 million and Sh100 million respectively.
  • Tokenisation firms must hold Sh10 million in paid-up capital and Sh2 million or 8% of total liabilities in liquid capital.
  • Initial Coin Offering (ICO) providers have requirements set at Sh20 million paid-up capital and Sh4 million or 8% of liabilities in liquid capital.
  • Virtual asset wallet providers are required to maintain Sh150 million paid-up capital and Sh30 million or 100% of current liabilities in liquid capital.
  • Investment advisory licences no longer require paid-up or liquid capital, opening the sector to smaller players.

The annual licence fee for stablecoin issuers remains at up to Sh2 million.

Context and Industry Response

The Virtual Assets Association of Kenya (VAAK) had previously cautioned that the high capital and fee requirements would limit Kenya’s ability to attract credible global crypto players. VAAK chairman Peter Onyango urged the government to revisit these conditions to foster growth.

These regulatory changes implement the Virtual Assets Service Providers Act 2025, which mandates the Central Bank of Kenya and Capital Markets Authority to jointly license and regulate virtual asset providers. The legislation aims to protect investors while addressing risks such as money laundering and terrorism financing linked to digital currencies.

Kenya has seen increasing adoption of stablecoins for cross-border payments, diaspora remittances, and corporate transactions, as they offer faster and cheaper alternatives to traditional banking channels.