Kenya has officially entered a new era of digital finance after President William Ruto signed the Virtual Asset Service Providers (VASP) Bill, 2025 into law on October 15, a landmark step that establishes the country’s first comprehensive regulatory framework for cryptocurrencies, exchanges, wallets, and blockchain-based businesses.
The move, that comes after parliament approved it last week, positions Kenya at the forefront of digital asset regulation in Africa, joining early adopters such as South Africa and Mauritius in formalising oversight of a sector that has long operated in a legal grey zone. This means eight African countries now have formal digital asset regulations, and another 34 are actively developing frameworks, a shift from regulatory hesitation to proactive policy-making.
The new law comes at a critical time. According to Chainalysis’ 2024 Global Crypto Adoption Index, Kenya ranks among the top ten countries worldwide for peer-to-peer cryptocurrency usage, driven by a youthful population, mobile money familiarity, and high remittance flows.
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Yet, the absence of a clear legal framework has exposed users to scams, exchange collapses, and fraud schemes, including those linked to Worldcoin’s suspension in 2023 and the collapse of informal trading networks.
Under the VASP Act, any entity dealing in digital assets, from exchanges and custodial wallets to NFT marketplaces, must now obtain a licence before operating in or from Kenya. Oversight will be shared between the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA), depending on the type of service provided.
To qualify, firms must maintain a registered local office, keep audited accounts, and meet strict capital, governance, and cybersecurity standards.
Crucially, the law embeds strong anti–money laundering (AML) and counter-terrorism financing (CTF) measures in line with Financial Action Task Force (FATF) recommendations.
Virtual asset providers will be required to verify user identities, flag suspicious transactions, and maintain transaction logs accessible to regulators. Non-compliance could attract fines running into millions of shillings or lead to criminal prosecution — a sign that Kenya intends to balance innovation with accountability.
For Kenya’s fast-growing crypto community, the legislation presents both opportunity and risk. On one hand, it offers long-awaited legitimacy that could attract foreign direct investment in Web3 startups and reassure users wary of unregulated platforms.
On the other, small-scale traders and informal exchanges, which dominate Kenya’s crypto landscape, may struggle with licensing fees and compliance costs, potentially consolidating the market in favour of larger players.
Still, the bill reflects a broader shift in the government’s stance. After years of warning citizens against cryptocurrencies, authorities now view digital assets as part of Kenya’s Digital Economy Blueprint, which aims to make the country a regional hub for fintech innovation.
President Ruto’s administration sees regulated blockchain adoption as key to improving transparency in remittances, cross-border payments, and tokenized asset markets — areas projected to grow rapidly across Africa.