Kenya has spent the past year trying to bring crypto companies under its watch. Since July, it has released rules for local and foreign operators to follow. Those rules came into effect on November 4.
The International Monetary Fund (IMF) supports Kenya’s push to regulate crypto. It just thinks some of the rules could do more harm than good. The IMF has asked Kenya to reconsider those requirements that would force stablecoin issuers to keep part of the money backing their coins in local banks.
Explain like I’m new here: Kenya spent years watching its crypto market grow without a dedicated law to regulate it. In 2025, the country passed the Virtual Asset Service Providers (VASP) Act, bringing crypto businesses under formal oversight.
The next step was deciding how those businesses should operate. Kenya proposed rules covering everything from licences to the money companies must hold to protect their customers.
Now, the IMF is questioning some of the provisions.
What’s the problem? Stablecoins are cryptocurrencies designed to hold a steady value, often backed by US dollars or other assets. Kenya wants issuers to keep some of those reserves in the country.
But the IMF argued that foreign issuers should be allowed to hold their reserves abroad, provided they meet strict safeguards. Requiring them to move money into Kenyan banks could discourage them from entering the market. On November 5, Nigeria also followed a similar logic, requiring foreign issuers to hold stablecoin reserves locally.
Kenya requires stablecoin issuers, including foreign operators, to hold at least KES 300 million ($2.3 million) in paid-up capital and keep 30% of their stablecoin reserves in Kenyan banks, with the remaining 70% invested locally. The IMF wants Kenya to review the minimum capital required of crypto businesses, arguing that the rules should reflect each company’s risk.
Zoom out: Kenya is trying to make crypto safer without making it too expensive to operate legally. The IMF is concerned that overly demanding rules could leave Kenya with fewer licenced companies, while crypto trading continues anyway.