Kenya Treasury Proposes Draft Crypto Laws Ahead of Public Feedback

TLDR

• Kenya proposes crypto licensing, reserve, and disclosure rules under 2026 law.
• Public feedback open until April 10 to shape virtual asset regulations.
• Stablecoin issuers must hold 30% reserves in Kenyan banks under draft law.
• Transaction fees set: 0.05% for tokens, 0.5% for initial asset offerings.
• Draft law expands crypto definitions, audits, and multi-agency

Kenya’s National Treasury unveiled a draft crypto law on Wednesday, introducing licensing, reserve, and disclosure requirements. The draft aims to regulate virtual asset service providers under the 2026 framework. Public commentary is open until April 10 to shape the final law.

The crypto law expands oversight after Kenya’s 2024 Financial Action Task Force grey listing. Authorities aim to address gaps in anti-money laundering and counter-terrorism financing measures. The draft sets clear operational rules to strengthen market integrity.

The Treasury formed the draft rules in consultation with the Central Bank of Kenya and Capital Markets Authority. The approach combines multi-agency input and international compliance standards. Stakeholders can review and submit feedback during public forums.

Licensing and Definitions Updated in Draft Crypto Law

The draft crypto law broadens licensing eligibility to include limited liability partnerships alongside companies. Regulatory authorities will provide responses within 90 days of application submissions. Licenses will now run for 12 months from the issuance date rather than expire on December 31.

The law also redefines virtual assets to include any digital representation of value linked to real-world assets. Issuers now include natural and legal persons creating or distributing crypto-assets publicly. The expanded definition aims to capture emerging token models and decentralized issuance mechanisms.

All virtual asset service providers must open and maintain a bank account in Kenya. System audits are required every two years to review cybersecurity, data integrity, and operational resilience. Certified IT auditors will conduct the assessments to ensure compliance.

Reserve Requirements and Transaction Levies Introduced

Stablecoin issuers under the draft crypto law must hold at least 30% of funds in segregated Kenyan bank accounts. Remaining reserves must be in secure, low-risk domestic assets qualifying as high-quality liquid assets. Eligible assets include cash, central bank deposits, short-term government securities, and repurchase agreements.

The law also proposes transaction-based levies for digital asset platforms. Token issuance platforms would pay a 0.05% fee per transaction, and initial virtual asset offerings would incur a 0.5% levy. Authorities designed the fees to fund supervision while maintaining market efficiency.

The Treasury has scheduled 11 public forums across Mombasa, Kisii, Kisumu, Makueni, Kirinyaga, Kakamega, Garissa, Kitale, Meru, Nakuru, and Nairobi. These events aim to gather feedback from market participants and civil society. The input will influence final amendments before the law takes effect.

The post Kenya Treasury Proposes Draft Crypto Laws Ahead of Public Feedback appeared first on CoinCentral.