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Kenya has opened a public consultation process on draft regulations that will govern cryptocurrency and digital asset businesses, marking a key step toward full implementation of the country’s virtual assets law.
The consultation was announced by John Mbadi, Cabinet Secretary of the National Treasury Kenya, through a public notice inviting feedback on the proposed Virtual Asset Service Providers (VASP) Regulations, 2026. Stakeholders have until April 10, 2026 to submit comments, with nationwide engagement forums scheduled to begin on March 30.
The process is expected to provide industry participants, regulators, and consumers an opportunity to shape key aspects of the framework, including licensing requirements, supervisory structures, and enforcement provisions before the regulations are finalised.
According to Mbadi, the draft rules were developed by a multi-agency task force in collaboration with the Central Bank of Kenya (CBK) and the Capital Markets Authority Kenya (CMA), alongside a Regulatory Impact Statement outlining their expected implications.
The regulations are designed to operationalise the Virtual Asset Service Providers (VASP) Act, which was signed into law by William Ruto in October 2025 and came into effect on November 4, 2025. The law establishes a formal legal framework for licensing and regulating digital asset activities within and from Kenya.
Kenya’s move toward regulating the crypto sector follows years of limited oversight. The CBK first issued warnings on virtual currencies in 2015, followed by similar cautionary statements from the CMA in 2018, leaving the sector largely unregulated until more structured policy interventions began in 2023.
That year, the government introduced a 3 percent Digital Asset Tax on crypto transactions, which was later replaced in 2025 with a 10 percent excise duty on service fees charged by virtual asset providers.
The country has since emerged as East Africa’s largest cryptocurrency market. Between July 2024 and June 2025, Kenya recorded approximately $19 billion in crypto inflows, according to data from Chainalysis, while more than six million Kenyans are estimated to use digital assets, based on research by Triple-A.
Given the scale of adoption, the new licensing framework is expected to have significant implications for both operators and users.
Industry stakeholders have already begun organising ahead of formal implementation. In December 2025, more than 50 firms established the Virtual Asset Association of Kenya (VAAK), a lobby group focused on engaging regulators and advocating for balanced policies that support innovation while ensuring compliance.
VAAK has also partnered with Africa Digital Assets, a policy research firm, to coordinate industry engagement with regulators.
Under the proposed framework, regulatory responsibilities will be shared between key institutions. The Central Bank of Kenya will oversee payment-related crypto activities, including stablecoin operations and conversion services, while the Capital Markets Authority will supervise exchanges, brokers, and tokenisation platforms.
The consultation marks a significant milestone in Kenya’s efforts to transition from a largely unregulated crypto market to a structured and supervised digital asset ecosystem, with the goal of enhancing investor protection, market integrity, and innovation.
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