Regulators Say Stablecoins Must Prove Real Value Beyond Faster Settlement
Central Bank of Kenya officials say stablecoins may ultimately be supervised through the same financial rules that already govern payments, deposits, and market products
Kenya’s financial regulators are moving toward a function-based approach to stablecoin oversight, with officials indicating that digital asset products could be regulated under existing payment, banking, or capital markets frameworks depending on how they are used.
Speaking during a panel at the Kenya Blockchain & Crypto Conference 2026 in Nairobi, Michael Eganza, Director of Banking and Payment Services at the Central Bank of Kenya, said regulators are increasingly focused on what digital tokens do rather than the technology stack behind them. Justus Agoti, Deputy Director for Market Deepening at the Capital Markets Authority, said regulators are seeking more direct engagement from companies building in the sector.
The discussion placed stablecoins alongside Kenya’s existing mobile money infrastructure rather than treating them as a completely separate financial category. Eganza repeatedly questioned whether many stablecoin functions materially differ from electronic money systems that have operated in Kenya for years.
“If it’s behaving like a payment system and a payment service, we’ll try and regulate it as a payment service,” Eganza said during the session.
His remarks offered one of the clearest public indications yet that the Central Bank of Kenya may avoid building an entirely standalone framework for stablecoins. Instead, regulatory treatment could depend on whether a token is used for retail payments, deposit-like activities, securities products, or money market functions.
Eganza compared stablecoin mechanics with Kenya’s established mobile money ecosystem, pointing to similarities in wallet structures, reserve backing, distribution networks, and redemption models. He argued that many blockchain payment systems reproduce functions already present in e-money platforms, including agent networks and fiat-backed token issuance.
The panel also exposed a cautious tone inside Kenya’s regulatory institutions around claims of cost reduction and efficiency in cross-border payments. Eganza referenced recent international research examining stablecoin settlement systems and said lower transaction costs remain difficult to prove once foreign exchange conversion and off-ramp expenses are included.
That position places Kenya’s regulators in a different posture from parts of the crypto industry that have framed stablecoins primarily as a replacement for traditional remittance infrastructure. Kenya already operates one of Africa’s most mature mobile money markets through services such as Safaricom’s M-Pesa, where low-value remittance transfers already settle quickly at consumer level.
At the same session, regulators attempted to reassure developers and startups that forthcoming rules are intended to formalize an industry that is already active rather than close it down.
Agoti said the Capital Markets Authority continues to operate a regulatory sandbox for companies testing digital asset and capital markets products. He encouraged firms to engage regulators early while draft legislation and policy frameworks continue moving through consultation and parliamentary review.
The discussion also highlighted how anti-money laundering compliance is likely to become central to Kenya’s licensing regime for virtual asset firms. Eganza said virtual asset service providers will fall under Kenya’s existing anti-money laundering framework through the Proceeds of Crime and Anti-Money Laundering Act, commonly known as POCAMLA.
Questions from the audience reflected growing industry concern around licensing timelines, taxation, and whether regulators could limit the number of approved Kenya shilling stablecoins in the market. Regulators rejected the idea of quota-based licensing, arguing that competition and prudential requirements would determine which firms survive.
“The market will decide what the quota is,” Eganza said.
The exchange comes as policymakers across Africa face pressure to define how digital asset businesses fit within existing financial systems. In Kenya, the conversation is increasingly moving away from whether stablecoins should exist toward how they interact with payments infrastructure, consumer safeguards, and financial supervision already embedded in the country’s banking and mobile money sectors.
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