Kenya Moves Closer to Crypto Regulation as VASP Bill Advances in Parliament

Kenya is edging towards comprehensive cryptocurrency regulation after its National Assembly approved the Virtual Asset Service Providers (VASP) Bill at the committee stage on Thursday. The legislation now proceeds to a third reading before being presented to President William Ruto for assent.

The bill represents Kenya’s most significant step toward establishing a formal legal framework for digital assets, reinforcing its ambition to position itself as East Africa’s leading crypto hub. As one of Africa’s top five cryptocurrency markets, Kenya is seeking to balance innovation and investment opportunities with tighter oversight of a fast-growing but largely unregulated sector.

Under the proposed framework, the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA) will serve as the primary regulators, while the National Treasury will be empowered to craft detailed subsidiary regulations. These will cover critical areas such as:

• Stablecoin issuance

• Tokenisation of real-world assets (RWAs)

• Operation of trading platforms

• Capital and solvency requirements

• Cybersecurity and advertising standards

• Anti-money laundering (AML) and counter-terrorist financing compliance

Kenya’s move reflects a broader continental trend toward crypto regulation. South Africa has already licensed 248 crypto service providers, Nigeria is piloting a licensing pathway through its regulatory sandbox while also developing a tax framework for digital assets, and Mauritius has fully aligned its rules with global standards set by the Financial Action Task Force (FATF).

The Bank of Ghana (BoG) is also preparing to present its own VASP Bill, developed in collaboration with the Securities and Exchange Commission (SEC) and the Financial Intelligence Centre (FIC), to Parliament. Once enacted, Ghana’s framework will provide regulatory oversight for exchanges, custodians, and other service providers.

For Kenya, where cryptocurrencies are widely used in informal remittances, payments, and trading, the VASP Bill could be a game-changer. A clear regulatory framework is expected to give fintech startups, tokenisation ventures, and global digital asset firms greater confidence to expand operations in one of Africa’s most dynamic crypto economies.

By advancing this bill, Kenya is not only moving toward greater market integrity but also signalling its readiness to compete regionally as a hub for responsible crypto innovation.