Nearly a third of Kenyan banks are prepared to venture into virtual assets such as cryptocurrencies and non-fungible tokens (NFTs), according to a new survey by the Central Bank of Kenya (CBK). This comes as the government intensifies efforts to regulate and encourage the adoption of digital assets in the country.
The CBK’s 2024 Innovation Survey reveals that 31% of commercial and microfinance banks expressed strong interest in engaging with virtual assets. The banks see potential in these technologies for expanding financial inclusion, especially for the unbanked population.
“Virtual assets offer alternative payment and investment channels that can improve transaction speeds and reduce costs,” the CBK report notes.
Cryptocurrencies like Bitcoin and platforms such as Binance have gained traction globally for their ability to facilitate direct, cross-border transactions without traditional banking intermediaries. In Kenya, although banks are currently barred from dealing in crypto, digital assets are already in widespread informal use, with UNCTAD estimating about four million local users.
Despite the growing interest, Kenyan banks remain cautious. The CBK highlighted several concerns raised by lenders, including the lack of robust frameworks to counter money laundering, terrorism financing, and fraud. Risks such as cybersecurity vulnerabilities and price volatility also remain top of mind.
“Thirty-five percent of financial institutions underscored the need for comprehensive regulation,” the CBK report states, citing areas like digital lending, blockchain, open banking, and virtual assets.
To address these issues, the government has introduced the Virtual Asset Service Providers Bill, 2025, requiring crypto firms to establish local offices and appoint directors subject to oversight by regulators such as the Capital Markets Authority (CMA).
Additionally, the Kenya Revenue Authority (KRA) is developing a new tax system to monitor real-time crypto transactions in a bid to curb tax evasion and illicit activity.
In a bid to make the environment more favorable for crypto adoption, the 2025 Finance Bill proposes slashing the digital asset levy introduced in 2023 from 3% to 1.5%, aligning it with the turnover tax rate for small businesses.
“This adjustment responds to calls from crypto traders who have been lobbying for a more equitable tax regime,” said Treasury Cabinet Secretary John Mbadi.
As Kenya moves toward a regulated digital economy, the financial sector appears increasingly ready to embrace virtual assets, cautiously but optimistically.
Written By Rodney Mbua
