Stablecoin

Chair

Challenge

Shiba Inu

Reserve

<ul>
 <li>Kenyan lawmakers questioned whether local reserve requirements protect users effectively.</li>
 <li>Parliament raised concerns over unclear stablecoin redemption timelines and terms.</li>
 <li>New rules require capital thresholds, reserve audits, and oversight.</li>
</ul>
Kenyan lawmakers have challenged a proposed rule that would require stablecoin issuers to keep 30% of their reserves in local commercial banks, raising concerns about its effectiveness and impact on international participation. 
The concerns emerged during discussions between the National Assembly’s Committee on Delegated Legislation, Treasury officials, and representatives from the virtual asset industry. <a href="https://www.facebook.com/ParliamentKE/posts/%F0%9D%90%82%F0%9D%90%8E%F0%9D%90%8C%F0%9D%90%8C%F0%9D%90%88%F0%9D%90%93%F0%9D%90%93%F0%9D%90%84%F0%9D%90%84-%F0%9D%90%8E%F0%9D%90%8D-%F0%9D%90%83%F0%9D%90%84%F0%9D%90%8B%F0%9D%90%84%F0%9D%90%86%F0%9D%90%80%F0%9D%90%93%F0%9D%90%84%F0%9D%90%83-%F0%9D%90%8B%F0%9D%90%84%F0%9D%90%86%F0%9D%90%88%F0%9D%90%92%F0%9D%90%8B%F0%9D%90%80%F0%9D%90%93%F0%9D%90%88%F0%9D%90%8E%F0%9D%90%8D-%F0%9D%90%91%F0%9D%90%80%F0%9D%90%88%F0%9D%90%92%F0%9D%90%84-%F0%9D%90%91%F0%9D%90%84%F0%9D%90%83-%F0%9D%90%85%F0%9D%90%8B%F0%9D%90%80%F0%9D%90%86-%F0%9D%90%8E%F0%9D%90%95%F0%9D%90%84%F0%9D%90%91-%F0%9D%90%92%F0%9D%90%93%F0%9D%90%80%F0%9D%90%81%F0%9D%90%8B%F0%9D%90%84%F0%9D%90%82%F0%9D%90%8E%F0%9D%90%88%F0%9D%90%8D-%F0%9D%90%91%F0%9D%90%94%F0%9D%90%8B%F0%9D%90%84%F0%9D%90%92-%F0%9D%90%92%F0%9D%90%84%F0%9D%90%84%F0%9D%90%8A-%F0%9D%90%81%F0%9D%90%91%F0%9D%90%8E/1491547189679707/" rel="noopener noreferrer nofollow">According to information shared on the Kenyan Parliament’s official Facebook page,</a> several lawmakers questioned whether the requirement would provide meaningful protection for local users. 
Under Regulation 74, stablecoin issuers would need to hold at least 30% of reserve funds in segregated accounts at commercial banks in Kenya. Additionally, issuers would have to invest the remaining reserves in secure, low-risk, high-quality liquid assets. The draft also requires reserve assets backing fiat-referenced stablecoins to match the currency to which each token is pegged. 
Samuel Chepkonga, chair of the Committee on Delegated Legislation, warned against creating regulations that differ significantly from international standards. He argued that Kenya should adopt rules that protect consumers while remaining competitive within the global digital asset market. 
Mathare MP Anthony Olouch also questioned the value of localizing only part of the reserves. He noted that many foreign issuers would still keep most reserve assets outside Kenya. Consequently, he argued that the proposal may not substantially improve consumer protection within the country. 
Lawmakers further observed that Regulation 74 would operate alongside Regulation 72, which already requires stablecoins to remain fully backed by reserve assets equal to the value of tokens in circulation. Those reserves must remain liquid, separate from company operating funds, and protected from creditor claims if an issuer becomes insolvent. 
Also Read: <a href="https://36crypto.com/shiba-inu-records-50-billion-shib-exchange-outflow-as-holders-accumulate/" rel="noopener noreferrer nofollow">Shiba Inu Records 50 Billion SHIB Exchange Outflow as Holders Accumulate</a> 
<h2 id="parliament-raises-concerns-over-stablecoin-redemption-rules">Parliament Raises Concerns Over Stablecoin Redemption Rules</h2>
Besides reserve requirements, lawmakers also scrutinized provisions governing stablecoin redemptions. Several members argued that the draft lacks clarity on how quickly issuers must process redemption requests. 
Kathiani MP Robert Mbui noted that the requirement for redemption “at any time” does not specify a settlement period. As a result, issuers could potentially delay repayments while still claiming compliance with the regulations. 
Committee members also highlighted inconsistencies between different sections of the framework. Regulation 68 requires issuers to redeem tokens on demand and at par value. However, Regulation 77 references redemption based on market value. 
Accordingly, lawmakers warned that the<a href="https://36crypto.com/kenya-moves-to-regulate-digital-assets-with-new-bill/" rel="noopener noreferrer nofollow"> conflicting language</a> could create uncertainty for users seeking to redeem their holdings. They said customers should clearly understand whether they would receive the pegged value or a market-determined amount. 
Committee Vice Chair Robert Githinji requested additional clarification from Treasury officials. Moreover, he supported further training and benchmarking against jurisdictions with more established digital asset regulations. 
The proposed rules would implement Kenya’s Virtual Asset Service Providers Act, which took effect on November 4, 2025. Under the framework, the Central Bank of Kenya would supervise stablecoin issuers, while the Capital Markets Authority would oversee exchanges, tokenization platforms, and investment-related virtual asset services. 
Stablecoin issuers would also need to maintain KSh500 million in paid-up capital and KSh100 million in liquid capital. Additionally, regulators would conduct monthly reserve examinations and require annual independent reviews. 
<h2 id="strong-conclusion-strong">Conclusion</h2>
Kenyan lawmakers continue to examine whether the proposed reserve and redemption requirements strike the right balance between consumer protection and market competitiveness. Their feedback could shape the final framework governing stablecoins and broader virtual asset activities in the country. 
Also Read: <a href="https://36crypto.com/charles-schwab-expands-into-prediction-markets-with-new-sp-500-contracts/" rel="noopener noreferrer nofollow">Charles Schwab Expands Into Prediction Markets With New S&amp;P 500 Contracts</a> 
The post <a href="https://36crypto.com/kenyan-lawmakers-challenge-stablecoin-reserve-rules-ahead-of-new-crypto-framework/" rel="noopener noreferrer nofollow">Kenyan Lawmakers Challenge Stablecoin Reserve Rules Ahead of New Crypto Framework</a> appeared first on <a href="https://36crypto.com" rel="noopener noreferrer nofollow">36Crypto</a>.

Kenyan Lawmakers Challenge Stablecoin Reserve Rules Ahead of New Crypto Framework

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