by Edward Aziegbe, Dispatch Reporter
NAIROBI, KENYA — Kenya’s National Treasury has officially gazetted the Virtual Asset Service Providers (VASP) Regulations 2026, cutting proposed minimum capital requirements for cryptocurrency firms by up to 40%.
When comparing the National Treasury’s initial draft published in March 2026 against the final Virtual Asset Service Providers Regulations, 2026 (Legal Notice No. 134, published in Kenya Gazette Supplement No. 185 on July 22, 2026), the government significantly reduced entry barriers across almost every license category following public and industry feedback:
| VASP License Category | March 2026 Draft | Final Gazetted Rules (July 2026) | Confirmed Percentage Reduction |
| Tokenisation Providers | KES 200 Million | KES 10 Million | Down 95.0% |
| Initial Coin Offerings (ICOs) | KES 200 Million | KES 20 Million | Down 90.0% |
| Token Issuance Platforms | KES 200 Million | KES 20 Million | Down 90.0% |
| Payment Processors | KES 50 Million | KES 10 Million | Down 80.0% |
| Brokers | KES 30 Million | KES 10 Million | Down 66.7% |
| Stablecoin Issuers | KES 500 Million | KES 300 Million | Down 40.0% |
| Exchanges | KES 150 Million | KES 100 Million | Down 33.3% |
| Virtual Asset Managers | KES 30 Million | KES 20 Million | Down 33.3% |
| Wallet Providers | KES 150 Million | KES 150 Million | 0% (Unchanged) |
| Investment Advisers | KES 2.5 Million | NIL | 100% (Capital Requirement Removed) |
The decision by Treasury Cabinet Secretary John Mbadi comes after extensive feedback from fintech operators warning that steep entry barriers would stifle local innovation and drive digital asset businesses offshore.
Key Regulatory Adjustments and Key Policy Concessions in the Final Legal Notice
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Stablecoin Issuers: Paid-up capital drops from KES 500 million to KES 300 million. Issuers must also hold liquid capital of KES 60 million or 100% of current liabilities for at least 30 days.
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Crypto Exchanges & Token Platforms: Minimum capital for exchanges fell to KES 100 million. Tokenization and payment processor entry fees saw significant reductions, dropping to KES 10 million.
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Wallet Custodians: Paid-up capital remains unchanged at KES 150 million, alongside a liquid capital mandate of KES 30 million or 100% of liabilities.
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Removal of Local Ownership Caps: The final gazetted text removed a proposed 33.3% local shareholding mandate.
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Targeted Capital Relief: Stablecoin issuers received a 40% reduction (from KES 500M to KES 300M), while early-stage innovation tracks like tokenization platforms and ICO providers saw cuts of 90% to 95% to prevent driving startups offshore.
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Individual Advisers: Capital requirements for investment advisers were completely removed, enabling smaller local firms and independent consultants to enter the market.
- Abolition of Trade Levies: The government dropped a previously proposed 0.05% levy on every exchange transaction
Implementation & Compliance Timeline
Existing digital asset businesses operating in Kenya have until 4 November 2026 to complete formal licensing applications. Applicants must incorporate locally, maintain a board of at least three directors, and implement strict customer asset segregation, AML/CFT screening, and cybersecurity controls.
Earlier, the Kenya virtual asset industry pushed back on the proposed regulations due to what it considered capital-requirement barriers that could potentially affect the ability of local innovators to compete with their global counterparts. Apparently, regulators have listened—at least to some noticeable extent—leading to the Treasury’s decision to revise capital thresholds.
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