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Four countries across the Middle East and Africa rolled out major crypto regulatory moves in the first quarter of this year. Dubai, Kenya, South Africa, and Nigeria each took different paths, but all want digital assets under formal watch.
The push comes as global regulators try to catch up with crypto’s explosive growth. Dubai’s Virtual Assets Regulatory Authority dropped a new Exchange Services Rulebook on March 31, and it’s got teeth. The big change? Retail leverage for crypto derivatives can’t go past 5:1 anymore. That’s version 2.1 of the rulebook, and it covers 45 firms holding VARA licenses—big names like Binance FZE and Crypto.com included. The 5:1 cap puts Dubai somewhere in the middle. Offshore exchanges still offer leverage up to 100:1, while the EU keeps crypto CFDs at 2:1. VARA didn’t mess around last year either. Between August 2024 and August 2025, the authority hit 36 firms with penalties.
Kenya’s Capital Demands Spark Pushback
Kenya released draft VASP Regulations 2026 on March 17. The numbers are pretty wild. Stablecoin issuers might need to hold KES 500 million—that’s $3.86 million—just to operate. Exchanges and wallet providers face lower thresholds, but the industry isn’t happy. The Virtual Asset Association of Kenya came out swinging, warning these requirements could wipe out 90% of current operators.
Kenya’s crypto market isn’t small. Between July 2024 and June 2025, the country saw $19 billion in crypto inflows. That puts Kenya at 21st globally for crypto adoption. But the proposed capital rules could basically hand the market to foreign players with deep pockets. Local operators probably can’t compete with those kinds of entry barriers.
South Africa took a different route. The FSCA built what looks like the region’s most mature regulatory setup. By December 2025, the authority had licensed 300 crypto firms out of 512 applications—a 59% approval rate. Not bad. The FSCA also went after unlicensed operations, launching 81 investigations.
The country got off the FATF grey list in October 2025, and crypto reforms played a role. South Africa implemented the OECD’s Crypto-Asset Reporting Framework early this year. The Financial Markets Act helped too, letting entities like VALR get licensed for crypto derivatives. A zero-threshold Travel Rule came into effect in early 2026, tightening things further.
Nigeria Flips From Ban to Pilot Program
Nigeria’s shift is kind of remarkable. The Central Bank launched an AML supervision pilot on March 31 with six entities. KuCoin and Flutterwave made the list. This is the same country that banned crypto-related bank accounts not long ago. Things change fast.
The pilot runs on monthly performance indicators and governance reviews. Nigeria’s market is massive—$92.1 billion in crypto transactions between July 2024 and June 2025. The Central Bank’s pilot includes stablecoin issuer cNGN and payment platforms like Paystack. Nigeria got off the FATF grey list too, which probably pushed the regulatory focus.
But cross-border recognition? Doesn’t exist yet. These four jurisdictions don’t recognize each other’s frameworks, which creates headaches for operators working across borders. Kenya’s capital thresholds might actually hurt the goal of boosting local participation. If only foreign-capitalized firms can meet the requirements, domestic players get squeezed out.
The enforcement picture varies a lot. Dubai and South Africa went hard on compliance—penalties, investigations, the works. Kenya’s draft regulations face serious industry resistance because of those high capital demands. The Virtual Asset Association of Kenya thinks the rules will kill competition and favor outsiders. That’s a problem if you want a healthy domestic market.
Dubai’s rulebook is comprehensive, covering derivatives with clear leverage limits. Nigeria’s pilot only includes six entities, so it’s way more limited in scope. The maturity levels across these four countries are all over the place. South Africa looks the most developed, with hundreds of licensed firms and a track record of enforcement. Kenya’s still in the proposal stage, facing blowback from the industry it’s trying to regulate.
The lack of coordination between these jurisdictions is a real gap. Operators face different standards depending on where they work. One country might demand $3.86 million in capital, another might run a six-entity pilot program. FM Intelligence’s analysis says harmonizing these frameworks could be critical for the region. Without it, enforcement gets messy and compliance becomes a moving target.
South Africa’s 300 licensed firms show what’s possible when regulators build a structured framework. The 59% approval rate suggests the FSCA didn’t just rubber-stamp applications—it actually reviewed them. The 81 investigations into unlicensed operations show the authority means business. Contrast that with Kenya, where the industry warns 90% of operators could disappear if the draft rules pass.
Nigeria’s pivot from prohibition to structured engagement happened fast. The Central Bank’s pilot might be small, but it’s a start. Monthly performance indicators mean the six entities will get watched closely. Governance reviews add another layer of oversight. The $92.1 billion in transactions shows why Nigeria can’t ignore crypto anymore—the market’s too big.
Dubai’s 45 licensed firms operate under clear rules now. The 5:1 leverage cap is stricter than offshore exchanges but looser than the EU. VARA’s penalty record—36 firms between August 2024 and August 2025—shows the authority won’t hesitate to crack down. Binance FZE and Crypto.com have to play by these rules or face consequences.
Kenya’s $19 billion in crypto inflows between July 2024 and June 2025 prove demand exists. The draft regulations could strangle that demand if the capital requirements stand. Foreign operators with millions to spare will enter the market. Local startups probably won’t. The Virtual Asset Association of Kenya sees this coming, which explains the pushback.
The region’s regulatory landscape keeps shifting. South Africa exited the FATF grey list in October 2025, partly because of crypto reforms. Nigeria followed suit, then launched its AML pilot. Dubai keeps refining its rulebook—version 2.1 just dropped. Kenya’s still debating what the rules should even look like. FM Intelligence’s full analysis covers these differences in detail, breaking down the data and comparing approaches across the four countries.
Frequently Asked Questions
What’s the new leverage limit for crypto trading in Dubai?
Dubai’s Virtual Assets Regulatory Authority set a 5:1 retail leverage cap for crypto derivatives in its Exchange Services Rulebook version 2.1, which took effect March 31.
How many crypto firms got licenses in South Africa?
South Africa’s FSCA licensed 300 crypto firms out of 512 applications by December 2025, achieving a 59% approval rate.
What capital does Kenya want stablecoin issuers to hold?
Kenya’s draft VASP Regulations 2026 propose requiring stablecoin issuers to hold KES 500 million, which equals about $3.86 million.
