Kenya Approves Crypto Law to Boost Investments

Kenya passes Virtual Asset Service Providers Bill, allowing CBK and CMA to regulate crypto and attract new investments.]

Kenya Passes Crypto Law to Boost Investments

NAIROBI, Oct 13 — Kenya’s parliament has approved the Virtual Asset Service Providers Bill, establishing legal rules for cryptocurrencies and digital assets as the government seeks to attract investment and reduce regulatory uncertainty. The law now awaits President William Ruto’s signature to take effect.

Finance Committee chair Kuria Kimani said the bill balances innovation with safeguards. He noted that while licensing, anti-money laundering, and consumer protection provisions were strong, oversight still needs effective enforcement, according to Reuters.

Key Provisions & Regulatory Framework

Under the law, the Central Bank of Kenya (CBK) will license issuance of stablecoins and other virtual assets, while the Capital Markets Authority (CMA) will regulate crypto exchanges and trading platforms.

Licensed virtual asset service providers (VASPs) must comply with know-your-customer (KYC) checks, hold customer assets separately, and meet capital or reserve requirements. The law also introduces penalties and enforcement mechanisms for non-compliance, reports Capital FM Kenya.

An earlier draft that proposed creating a standalone Virtual Assets Regulatory Authority (VARA) was dropped. Regulators said relying on existing institutions will reduce duplication and enhance efficiency, according to Kenyan Wall Street.

Market & Industry Response

Industry stakeholders welcomed the clarity the law brings. Many said it will allow informal operators to formalize under regulation, Capital FM reported.

However, analysts cautioned that the law’s success will depend on strong regulatory capacity and transparency. Enforcement, audits, and staffing of oversight bodies are expected to be key challenges.

A Business Daily Africa survey found that about 31% of Kenyan banks are open to offering crypto-related services once the legal framework is in place — a signal that the sector could soon see integration with mainstream finance.

Regional & Global Context

Kenya joins other African nations — including Nigeria, South Africa, and Uganda — in establishing crypto regulations.

The framework mirrors hybrid models used abroad, where central banks regulate issuance and securities authorities oversee trading. Analysts told CryptoNews the setup could balance innovation with financial stability.

Global platforms such as Binance and Coinbase have already expressed interest in entering regulated African markets, with Kenya’s new law likely to give them a clearer legal footing, per Reuters.

What Comes Next

Once President Ruto signs the bill, regulators are expected to issue licensing guidelines, supervision rules, and compliance timelines. Entities currently operating in the crypto space will need to register under the new framework, Capital FM said.

The National Treasury will likely coordinate cross-border and tax-related regulations as Kenya positions itself as a regional fintech and crypto hub, according to Modern Diplomacy.