By James Kisoo ,
The CBK revealed that the Treasury Cabinet Secretary, John Mbadi, was developing new regulations based on advice from the CBK and the Capital Markets Authority (CMA).
In effect, no firm is authorised to operate as a licensed VASP in or from the country until the regulations are formally gazetted, despite the fact that the Virtual Assets Service Providers Act, 2025, has come into effect.
“Accordingly, the Cabinet Secretary, National Treasury, pursuant to the Act and upon the advice of CBK and CMA is developing and shall issue Regulations for further guidance on implementation of the Act,’ a statement from the CBK read.
The regulatory update follows the commencement of the Virtual Assets Service Providers Act, 2025, which took effect on November 4 after being gazetted on October 21.
Notably, the Act is Kenya’s first comprehensive legal framework for digital asset service providers, including token issuers, wallet operators and cryptocurrency exchanges.
The law places strict ‘guard rails’ on VASPs to prevent cases of money laundering, terror financing and other malpractices within the digital asset realm.
The types of licenses will largely depend on the activities which a digital service provider engages in as guided by the First Schedule of the Act, which lists virtual asset activities, including transfer services, running a crypto exchange, and so on.
With new regulations, Kenya is set to be aligned with international standards set by the Financial Action Task Force (FATF), which has been a strong advocate for stronger oversight of digital asset markets.
Kenyans hold an estimated USD 1.2 trillion (Ksh155 trillion) in virtual assets, with the legislation providing critical safety rails to assure investors and companies that the state is a safe place to develop new opportunities.
A report released by the International Monetary Fund in January confirmed that Kenya used stablecoins to handle international debts when the country was hit with a shortage of US dollars.
The report also noted that Kenya used stablecoins to hedge against the shilling as it experienced volatility.
