The government of Kenya has delayed the licensing of Virtual Asset Service Providers (VASPs) as the National Treasury drafts new regulations to guide implementation of the Virtual Assets Service Providers Act, 2025.
In a public notice on Tuesday, November 18, the Central Bank of Kenya (CBK) stated that Treasury Cabinet Secretary John Mbadi is preparing regulations following advice from both CBK and the Capital Markets Authority (CMA). Until these regulations are formally gazetted, no firm will be authorized to operate as a licensed VASP in or from Kenya, despite the Act coming into effect on November 4.
“Accordingly, the Cabinet Secretary, National Treasury, pursuant to the Act and upon the advice of CBK and CMA, is developing and shall issue Regulations for further guidance on implementation of the Act,” read a statement from the CBK.
The Act is Kenya’s first comprehensive legal framework for digital asset service providers, covering token issuers, wallet operators, and cryptocurrency exchanges. It introduces strict measures to curb money laundering, terror financing, and other illicit activities within the digital asset ecosystem. Licenses will be categorized based on the type of virtual asset activity, as detailed in the Act’s First Schedule, which includes crypto exchanges, transfer services, and wallet operations.
Both CBK and CMA confirmed that no licenses have yet been issued. Licensing will commence only after the new regulations are officially published, aligning Kenya with international standards set by the Financial Action Task Force (FATF).
Kenya’s virtual asset market is estimated at USD 1.2 trillion (Ksh 155 trillion), with the new regulations providing crucial safeguards for investors and companies exploring opportunities in this sector. A recent International Monetary Fund report noted that Kenya had used stablecoins to manage international debt and mitigate currency volatility, highlighting the growing role of digital assets in the national economy.
The upcoming regulations are expected to ensure investor protection while creating a secure and transparent environment for the development of Kenya’s digital asset ecosystem.
