NAIROBI, Kenya — Kenya is on the brink of becoming a regulatory benchmark for digital assets in Africa after its Parliament successfully passed the Virtual Asset Service Providers (VASP) Bill, 2025, through its third reading.
The legislation now requires only President William Ruto’s assent to be enacted, paving the way for one of the continent’s most comprehensive cryptocurrency regulatory frameworks.
The VASP Bill establishes a joint oversight structure for virtual assets, granting regulatory authority to both the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA).
Furthermore, the bill empowers the Treasury Cabinet Secretary to issue detailed regulations covering key areas such as stablecoins, the tokenization of real-world assets, trading platform operations, capital and solvency requirements, and robust Anti-Money Laundering (AML) compliance protocols.
Industry impact and legal clarity
Months of internal debate and public consultations shaped the final draft, which reportedly includes stricter compliance and licensing requirements for virtual asset firms, although the final text is not yet publicly available.
For industry players, the impending law marks a crucial turning point. Both local and global firms—including Luno, Busha, KotaniPay, Fonbnk, Swypt, and Binance—would gain a clear, legal pathway to operate within Kenya under a defined licensing regime.
This promises to resolve the prevailing regulatory ambiguity that has characterized the sector.
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Chebet Kipingor, operations lead at Busha Kenya, captured the significance of the moment, stating that Kenya is: “one signature away from making regulatory history.”
The specific details of the forthcoming regulations will be vital. Critical questions remain regarding the precise definitions of capital adequacy, the methods for safeguarding customer assets, and the exact nature of disclosure requirements.
Analysts note that excessive bureaucracy could stifle innovation and discourage startups, while a clear and equitable framework could position Kenya as a major hub for crypto innovation across Africa.
Financial reform and international compliance
The VASP Bill is linked to Kenya’s broader financial reform agenda. The country is currently working to meet international standards required to exit the Financial Action Task Force (FATF) greylist and fulfill commitments tied to its IMF Extended Fund Facility programme.
Establishing a strong, legally mandated framework for virtual assets is expected to significantly enhance the country’s financial oversight, strengthen its overall financial system, and boost investor confidence.
