Kenya accelerates blockchain regulation efforts nationwide

Kenya has taken a major leap forward in formalizing the regulation of blockchain and digital-asset activity with the passage of a new law aimed at bringing clarity and oversight to the sector. On 13 October 2025, the country’s parliament approved the Virtual Asset Service Providers Act, 2025 (VASP Act), paving the way for lawful and regulated use of cryptocurrencies, stablecoins and other blockchain-based assets.
This marks a shift from previous uncertainty and establishes a legal framework designed to encourage innovation while protecting investors and users.
Under the new law, entities dealing in virtual assets must obtain licenses from appropriate regulators — the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA) — depending on the services offered, including stablecoin issuance, crypto exchanges, and custody or wallet services.
The licensing regime includes anti-money-laundering (AML) and know-your-customer (KYC) requirements; reporting obligations; capital-reserves rules; and provisions for stable regulatory oversight — features that aim to safeguard consumers and reduce illicit financial flows.
Proponents of the legislation believe it could transform Kenya’s digital economy. Industry actors say the VASP Act provides the long-awaited regulatory certainty needed for investors, startups, and financial institutions to confidently build or expand blockchain and digital-asset services.
They expect the law to unlock fresh capital flows, stimulate innovation in fintech and crypto, and integrate Kenya more fully into global digital-finance networks. According to observers, these developments could help position Kenya as a regional hub for blockchain-led fintech in Africa.
Looking ahead, the success of Kenya’s blockchain regulation will depend on effective implementation, transparent oversight and inclusive access. Regulators — CBK, CMA and others designated under the Act — must now roll out licensing frameworks, enforce compliance, and build capacity for supervision. If done properly, the new regulatory regime could support responsible growth of digital assets, encourage innovation, and enhance financial inclusion across the country.