The Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA) have announced the commencement of the Virtual Assets Services Providers Act 2025 effective Nov 4, 2025.
The act establishes a framework for licensing and regulating Virtual Assets Service Providers (VASPs) in Kenya, allowing only licensed entities to operate in virtual asset services, as the country seeks to boost investments in the sector by putting clear rules in place for the emerging industry.
The act strengthens Anti Money Laundering (AML) and Counter-Financing of Terrorism (CFT) measures and requires compliance. Failure to comply will attract a penalty of KES 3 million for individuals and KES 10 million for companies.
The CBK will act as the licensing authority for issuance of stablecoins and other virtual assets, while the CMA will license those who wish to operate crypto exchanges and other trading platforms.
Virtual Assets Services Providers Act 2025: A key milestone for Kenya
The enactment of the Virtual Assets Services Providers Act, 2025 marks a major milestone for Kenya placing the country at par with other countries including South Africa as the only countries in Africa with laws that govern the digital assets industry. The legal clarity is set to attract increased investment into the financial technology sector including interest from crypto exchanges like Binance and Coinbase.
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. Licensing of VASPs is set to start as soon as the Regulations are issued.
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