Kenya is set to take a major step in regulating digital assets with the implementation of the Virtual Assets Service Providers (VASPs) Act, 2025. The law, which became effective on November 4, 2025, aims to provide a clear regulatory framework for cryptocurrencies and other virtual assets, addressing concerns over money laundering and terrorism financing.
The National Treasury, under Cabinet Secretary John Mbadi, is preparing regulations to guide the law’s implementation. The Treasury will work closely with the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA) to ensure proper licensing and oversight of virtual asset service providers operating in the country.
Under the Act, the CBK will serve as the licensing authority for stablecoins and other digital currencies, while the CMA will regulate crypto exchanges and trading platforms. These measures are expected to bring clarity to Kenya’s emerging digital asset market, encouraging both domestic and foreign investment.
MP Kuria Kimani, chairman of the National Assembly’s Finance Committee, noted that the law draws from global best practices in countries like the United States and Britain, aiming to provide a safe environment for digital asset trading. Currently, neither the CBK nor CMA has licensed any VASPs under the Act, highlighting the importance of the upcoming regulations.
Kenya has long been recognised as a pioneer in financial innovation, thanks to M-Pesa, Safaricom’s mobile-based platform offering money transfers, savings, and investment services to millions of users. By extending regulatory oversight to cryptocurrencies and virtual assets, the government hopes to maintain this leadership while safeguarding against misuse of emerging technologies.
The new law requires VASPs to implement robust systems to prevent money laundering, terrorism financing, and proliferation financing. With Treasury, CBK, and CMA awaiting formal guidance from CS Mbadi, the implementation of the Act is expected to boost confidence in Kenya’s digital finance sector.
As the country moves to regulate this fast-growing industry, businesses and investors will now have clear rules, marking a critical milestone in Kenya’s digital finance journey.
