- The parliament of Kenya passed the Virtual Asset Service Providers Bill where the existing regulators will be mandated to regulate the crypto industry.
- Licensed providers are required to safeguard client assets, obtain insurance, open local bank accounts as well as meet anti-money-laundering requirements.
- The Kenya parliament is looking to make Kenya the center of digital assets in Africa and this has attracted the attention of the big players such as Binance and Coinbase because of the legal clarity in Kenya.
The parliament of Kenya has passed the Virtual Asset Service Providers Bill, 2025, a milestone in the regulation of the cryptocurrency and digital assets. Once the president William Ruto signs the bill into law, a more systematic and transparent digital economy would become possible.
Comprehensive Regulatory Framework Introduced
The new legislation places regulation duties on other comparable regulators and establishes a clear legal establishment of the rapidly expanding industry. The issuance of the license of the issuance of the stablecoins and any other tokens to purchase and sell the virtual assets will be overseen by the Central Bank of Kenya (CBK) and the exchanges and trading platforms undertaken to transact virtual assets will be regulated by the Capital Markets Authority (CMA).
Virtual asset service providers based in Kenya or outside based in Kenya – such as cryptocurrency exchanges, wallet providers or token engines – are required to register upon application and operate in line with regulatory frameworks. The applicants should also be qualified applicants, including companies that are limited by shares; both local companies and foreign companies, registered under companies act.
The committee chair in finance and National Planning Committee Kuria Kimani labeled the passage of the bill as a critical development. He said, “This is a landmark moment for Kenya’s financial ecosystem. It provides clarity, promotes innovation, and protects consumers from fraudulent digital schemes.” Instead of forming a new authority, lawmakers chose to use the existing institutions to “avoid duplicating mandates and reduce legal ambiguity.”
Operational Safeguards and Compliance Rules
The framework establishes operational safeguards that enhance trust in the crypto sector. Licensed Virtual Asset Service Providers (VASPs) will be obligated to protect client assets, secure insurance coverage, have a local bank account for supervisory oversight, and develop appropriate conflict-of-interest policies.
Regulators will be given inspection and enforcement functions to supervise and sanction failed operators. The framework joins the global standard that obliged the sector to report anti-money-laundering and counter-terrorist financing obligations.
The legislative change builds on tax changes introduced through the Finance Act 2025.. The repeal of the 3% Digital Asset Tax and the introduction of a 10% excise duty on service fees signal a shift from taxing asset values to platform-based charges.
Kenya Aims to Become Africa’s Digital Asset Hub
Lawmakers believe the bill will attract global crypto companies to the Kenyan market. Kimani noted ongoing talks with major platforms, stating, “We are hoping that Kenya can be now the gateway into Africa.”
The law uses existing regulatory practice in the U.S. and U.K. and gives global investors the confidence of a legal framework. After it becomes a law, the regulators will declare the comprehensive procedures of licensing, disclosure requirements, and the compliance dates and the transition to existing service providers.
With its existing mobile money ecosystem started with M-Pesa, Kenya is well positioned to lead in the space of digital finance. The passage of this historic legislation allows Kenya to be among other select African countries like South Africa, Nigeria, and Mauritius that have a comprehensive legislative framework for cryptocurrency and digital assets.
