The National Assembly has passed the Virtual Asset Service Providers Bill, 2025, setting the stage for Kenya to formally regulate cryptocurrency and other digital asset activities for the first time.
The Bill, officially National Assembly Bill No. 15 of 2025, introduces a legal framework for the registration, licensing, and supervision of entities offering virtual asset services within or from Kenya.
Lawmakers say the new legislation will foster innovation in the fintech sector while enhancing consumer protection and financial system integrity.
Under the proposed law, all persons or companies providing virtual asset services will be required to obtain a license from a designated regulatory authority.
These may include the Capital Markets Authority (CMA), the Central Bank of Kenya (CBK), or a new Virtual Assets Regulatory Authority, depending on the type of service offered.
Only companies limited by shares, whether local or foreign, will qualify for licensing under the Act. The framework seeks to ensure compliance with key standards on anti-money laundering (AML), consumer protection, and data privacy.
To strengthen investor confidence, licensed Virtual Asset Service Providers (VASPs) will be required to maintain adequate safeguards for client assets, hold insurance coverage, and operate bank accounts within Kenya for monitoring purposes.
The Bill also mandates VASPs to establish internal policies for managing conflicts of interest and to maintain transparent operational records.
Regulators will have enhanced powers to supervise, inspect, and penalize non-compliant firms, with provisions for cross-agency collaboration to combat financial crimes and promote international cooperation.
The Bill aligns Kenya’s financial laws with global standards by broadening the AML framework to include countering the financing of terrorism (CFT) and countering proliferation financing (CPF) obligations.
In a notable clarification, the Bill excludes virtual service tokens, such as loyalty or reward points, from the definition of virtual assets, meaning businesses dealing solely with these tokens will not require licensing.
Industry observers have welcomed the move as a critical step toward positioning Kenya as a regional fintech hub.
By providing legal certainty, they argue, the law will encourage innovation while shielding consumers from risks seen in unregulated crypto platforms.
Once signed into law, the Virtual Asset Service Providers Act, 2025, will usher in a new era of transparency, security, and trust in Kenya’s digital financial ecosystem, balancing innovation with regulation in one of Africa’s fastest-growing fintech markets.