Kenya Proposes First Regulatory Framework for Cryptocurrencies
TLDR
- Kenya has proposed its first regulatory framework for digital assets, signaling a shift in policy for one of Africa’s most active crypto markets
- The Virtual Asset Service Providers Bill 2025 outlines licensing requirements for crypto exchanges, stablecoin issuers, digital wallets, ICOs, and tokenisation platforms
- The CBK will oversee wallet providers, stablecoins, and crypto payment processors, while the CMA will regulate exchanges, token offerings, investment advisors, and asset managers
Kenya has proposed its first regulatory framework for digital assets, signaling a shift in policy for one of Africa’s most active crypto markets. The Virtual Asset Service Providers Bill 2025 outlines licensing requirements for crypto exchanges, stablecoin issuers, digital wallets, ICOs, and tokenisation platforms.
The draft law assigns regulatory responsibilities to both the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA). The CBK will oversee wallet providers, stablecoins, and crypto payment processors, while the CMA will regulate exchanges, token offerings, investment advisors, and asset managers. The bill also brings ICOs under regulation, requiring disclosures similar to stock market IPOs. Tokenisation platforms must register and provide detailed asset valuation and custody information.
Stablecoin issuers will face reserve requirements, audits, and governance rules. Non-compliance could result in fines up to KES 20 million ($155,000) and potential criminal charges. The move reverses the CBK’s earlier stance from 2015, when it warned against crypto use. Kenya now ranks among Africa’s top adopters, with nearly half of consumers holding crypto, according to FSD Africa.
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Points clés à retenir
Kenya’s draft crypto bill marks a major step toward formalising the digital asset sector, which until now operated without regulatory oversight. By introducing dual oversight from the Central Bank and the Capital Markets Authority, the framework mirrors global trends aiming to manage both systemic and investor-specific risks. The inclusion of ICOs, tokenisation, and stablecoins shows Kenya’s intent to regulate beyond speculation—into emerging use cases such as fractional investment and cross-border payments. This could strengthen consumer protection and encourage institutional participation. However, implementation will be key. Regulators will need to build technical capacity and maintain agility to keep pace with evolving technologies. The bill’s penalties for non-compliance and its licensing structure reflect a shift from permissive experimentation to accountable innovation. For startups, the framework could provide regulatory clarity, but also raise entry costs. If passed and enforced effectively, Kenya could position itself as a regional hub for blockchain innovation and digital finance.
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