Kenyan Treasury pushes back 30% reserve requirement as stablecoin firms warn of higher costs

Protect the local market

Cryptocurrency Kenya’s stock exchanges and national treasury are said to be stuck in an impasse over proposed regulations that would force stable coin Issuers must hold a significant portion of their reserves in local banks. According to one report, the rule requires crypto scholarships must hold at least 30% of all funds received for stable coins issued on dedicated accounts in commercial banks in Kenya.

The Treasury proposal would aim to protect Kenya’s financial ecosystem from volatility digital asset markets, protecting local investors and ensuring that stable coins operating in the country have liquidity.

However, digital currency players say the 30% local reserve mandate is too restrictive and conflicts with the decentralized nature of the global market. crypto platforms. Industry officials warn that locking up almost a third of their reserves in Kenyan commercial banks could stifle their operations. liquidityslows transaction speeds and increases costs for consumers who use stablecoins for cross-border commerce and remittances.

The dispute comes amid ongoing efforts by Kenyan regulators to bring the fast-growing digital assets sector into the formal regulatory fold. While the National Treasury views the local bank buffer as a necessary safeguard against potential consumer losses, crypto platforms say alternative global custody frameworks are better suited to manage the stability of stablecoins.

The impasse did not interrupt discussions. Kenya’s crypto industry leaders are pushing for continued engagement with regulators, saying a collaborative approach is needed to balance investor protection and sector growth.

No deadline has been set for the draft rules as consultations between state financial regulators and industry stakeholders continue.