Kenyan crypto startups eye Mauritius, South Africa over steep capital rules

Kenyan cryptocurrency startups are considering shifting operations to Mauritius or South Africa after new regulations imposed minimum capital requirements that founders say could price smaller companies out of the country's rapidly growing virtual-asset market.

At least five startup founders are considering registering their businesses in Mauritius or South Africa if they cannot raise the capital needed to comply with Kenya's new licensing regime by November 4, Business Daily reported.

The Virtual Asset Service Providers Regulations, 2026, gazetted on July 22, set minimum paid-up capital according to the activity being carried out. Stablecoin issuers face the highest requirement at KES300mn ($2.32mn), while wallet providers need KES150mn ($1.16mn), exchanges KES100mn ($774,000), virtual-asset managers KES20mn ($155,000), and payment processors and brokers KES10mn ($77,000). Investment advisers have no fixed paid-up capital requirement. 

The final thresholds are substantially lower than those initially proposed. The draft rules had required KES500mn for stablecoin issuers, KES200mn for several types of token offerings, KES150mn for exchanges and KES50mn for payment processors.

But local startups say the revised requirements remain difficult for early-stage businesses that have yet to attract large amounts of venture capital.