Kenya’s central bank and treasury have introduced new rules governing stablecoin usage in payments, aiming to improve the efficiency of remittances. The policy, outlined in a recent statement, outlines how stablecoins can be integrated into the financial system under regulated frameworks.
The new guidelines focus on ensuring transparency, security, and compliance with existing financial regulations. They require stablecoin issuers to meet strict capital requirements and maintain reserves equivalent to the value of the coins. This is intended to prevent fraud and protect users from volatility.
The move comes as remittances remain a crucial source of income for many Kenyan households. According to the World Bank, remittances to Kenya reached over $10 billion in 2023, with a significant portion coming from diaspora communities in the United States and the United Kingdom.
The Central Bank of Kenya has emphasized that the new rules will help modernize the payment system, making it easier for individuals to send and receive money across borders. It also aims to reduce reliance on traditional money transfer services, which often charge high fees.
This policy follows a broader push by the Kenyan government to promote digital financial services. In 2022, Kenya launched a national digital payment strategy, aiming to increase financial inclusion and reduce the use of cash. The stablecoin regulations are seen as a key part of that effort.
