Kenya Enacts First Crypto Law via Virtual Asset Service Providers Act, 2025

Kenya has taken a decisive step into the regulated digital asset era. On 15 October 2025, President William Ruto assented to the Virtual Asset Service Providers Act, 2025, making it the country’s first full-fledged legal framework governing cryptocurrency, stablecoins, tokenization, and related services.

Previously, Kenyan crypto activity operated in a regulatory gray zone—users, exchanges, and local fintechs lacked clear legal recourse or oversight. The VASP Act changes that. Under the new regime, the Central Bank of Kenya (CBK) will become the licensing authority for the issuance of virtual assets, including stablecoins, while the Capital Markets Authority (CMA) will supervise crypto exchanges, trading platforms, custody providers, and asset‑management functions. 

The law also empowers the Kenyan Treasury to issue subsidiary regulations, thereby fleshing out operational and compliance rules over time. Provisions in the Act establish requirements on anti‑money laundering (AML) and counter‑terrorism financing (CFT), segregation of client assets, registration, audits, licensing sanctions, and consumer protection.

Supporters argue that regulatory clarity will boost both domestic and foreign investment into Kenya’s fast‑growing fintech and crypto sectors. In remarks reported by Reuters, Kuria Kimani, chair of the National Assembly’s Finance Committee, stated that the framework is intended to “balance safety and innovation” and attract platforms like Binance and Coinbase to regard Kenya as a gateway to the African market. 

Yet questions remain. Some analysts caution the law might not be entirely future‑proof. It does not expressly address decentralised finance (DeFi) or non‑fungible tokens (NFTs), and it lacks a sandbox approach for innovators to test new models under light oversight. 

Further, global compatibility—for instance with frameworks emerging in the EU and under FATF—will test how well Kenya’s law scales for cross‑border crypto activity.

Still, the passage of the VASP Act marks a turning point. Kenya is now firmly in the regulated club of nations with explicit digital asset laws. How quickly the regulatory bodies implement rules, enforce compliance, and foster innovation will determine whether Kenya can translate legal status into real leadership in Africa’s crypto economy.