Regulating stablecoins: Lessons from Africa

Kenya sets the pace: A comprehensive regulatory architecture 

In 2025, Kenya introduced the Virtual Asset Service Providers (VASP) Bill, outlining clear guidelines for the regulation of stablecoins, initial coin offerings (ICOs), and digital asset platforms. The proposed law assigns complementary supervisory roles to the Central Bank of Kenya and the Capital Markets Authority, creating a dual-regulation structure designed to strengthen governance and reduce systemic risks​.

Key elements of the bill include:

• Mandatory licensing for stablecoin issuers.
  
  
• Reserve backing requirements and regular audits.
  
  
• Governance guidelines emphasizing operational transparency and consumer protection.
  
  

Beyond merely regulating innovation, the bill aims to promote financial inclusion and fintech development while maintaining macroeconomic stability.

Latin America in perspective: Are we ready?

While Kenya moves ahead with comprehensive regulatory proposals, Latin American countries like Mexico, Brazil, and Colombia remain in earlier stages of stablecoin policy development:

• Brazil saw a 135% year-on-year growth in its online gaming and betting sector in 2023, with over 100 million players and USD 11 billion spent, underscoring the urgent need for clear regulations in sectors increasingly turning to stablecoins​.
  
  
• Mexico enacted a Fintech Law in 2018 but still lacks targeted regulations for stablecoins and other complex digital assets.
  
  
• Colombia has piloted regulatory sandboxes but lacks a consolidated legal framework for digital assets and stablecoins.
  
  

Kenya demonstrates that regulatory innovation is not limited to the Global North. Its forward-thinking approach provides a clear and functional path toward integrating stablecoins into traditional financial systems.

For Latin America, this is a critical moment to craft structured regulations that not only foster innovation but also protect financial systems and promote trust. As stablecoins become increasingly central to international commerce, understanding these regulatory developments will be essential for fintechs, PSPs, and money transmitters operating across borders.