The National Treasury and the Central Bank of Kenya (CBK) are considering how stablecoins and other digital assets could be used in cross-border payments and remittances.
The proposal is contained in the Draft National Payment System Policy, 2026, which identifies virtual assets and digital currencies as areas that require clearer rules as the payments sector changes.
Under the draft policy, stablecoins and tokenised assets could become part of the systems used to move money across borders, with activities placed under the supervision of regulators including the CBK and the Capital Markets Authority (CMA).
Stablecoins are digital assets designed to maintain a relatively stable value, with some of the most widely used ones linked to currencies such as the US dollar.
The Treasury said the growing use of new payment technologies has created areas that require further policy and regulatory clarity.
These include instant payments, open finance, virtual assets, digital currencies, cross-border payments and emerging payment technologies.
“Fast evolution of payment technologies, business models, and market structures has caused the need for further clarification in policies and regulation,” the Draft National Payment System Policy says.
It follows the government’s publication of the Virtual Asset Service Providers Regulations, 2026, to establish the framework within which virtual asset businesses will be licensed and regulated.
Among other things, the regulations govern matters of stablecoin issuance, capital, consumer protection, and safety of customer funds.
The growing focus on stablecoins comes against a backdrop of challenges regarding cost and speed of cross-border fund transfer.
According to the Draft National Payment System Policy, the issue is based on findings of the 2025 Remittances Household Survey, where 83.3 per cent of cash recipients cited the cost of transferring money as their biggest challenge.
Long processing times and limited links between different payment systems have also made cross-border transfers difficult.
The Treasury says it wants to make international payments more affordable, efficient and easier to access.
However, the draft policy does not state that stablecoins will be the solution to these challenges.
Experts have previously raised concerns about how restrictions on widely used dollar-backed stablecoins such as USDT and USDC could affect the digital payments market.
They have warned that limiting access to such assets could reduce liquidity and make some international transactions more expensive.
The proposed policy therefore comes as Kenya works to develop clearer rules for digital assets while also looking at ways of improving the country’s wider payment system.