Kenya has taken a major step toward formalizing its position in the global digital finance landscape by passing the Virtual Asset Service Providers Bill 2025, a landmark law designed to regulate the country’s booming cryptocurrency market. The legislation, recently approved by Parliament and awaiting President William Ruto’s assent, creates a clear and structured legal environment for digital assets such as cryptocurrencies and stablecoins. Lawmakers argue that the bill is crucial for investor protection, sector transparency, and long-term economic positioning. As Kenya continues to experience rapid crypto adoption—especially among young people—authorities see regulatory clarity as essential for sustaining growth and attracting global players like Binance and Coinbase.
The new framework assigns oversight responsibilities to two existing regulatory bodies instead of creating a new authority: the Central Bank of Kenya will license stablecoins and similar virtual assets, while the Capital Markets Authority will supervise exchanges, brokers, and other market intermediaries. The law sets strict operational requirements for service providers, including mandatory physical offices, board governance structures, segregation of client funds, adherence to KYC and anti–money laundering rules, and independent IT audits. Operators who fail to comply risk fines of up to 25 million Kenyan shillings or potential imprisonment. This structured approach aims to position Kenya alongside early African adopters like South Africa and Mauritius, while also supporting its broader effort to exit the FATF grey list and increase confidence among international institutions.
Still, experts caution that Kenya’s ambitious regulatory blueprint will only succeed if implementation is balanced and practical. Concerns remain about licensing costs, solvency requirements, and whether smaller firms will be able to meet the compliance burden. The requirement for a physical local presence has also sparked debate, with critics warning that it could deter fully digital, decentralized operators—echoing challenges faced in Nigeria’s earlier confrontation with Binance. Nevertheless, with over 6 million Kenyans already using cryptocurrencies and regional crypto activity rising more than 50% year-on-year, the reform signals Kenya’s determination to become a leading digital finance hub in Africa.