Kenya officially enters a brand new digital age. William Ruto has signed Kenya’s first comprehensive crypto-regulation framework, the Virtual Asset Service Providers Act of 2025.
New law The licenses are issued to crypto exchanges as well as wallet providers, payment processors, brokers, or other companies that conduct business in Kenya. It also brings the fast-growing sector under the oversight of two main regulators — the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA).
According to the Act, CBK supervises payment processors and issuers of stablecoins while CMA oversees trading platforms, asset managers, investment advisors, and advisers. Each agency will have to ensure compliance with standards for consumer protection and anti-money laundering.
“We are hoping that Kenya can now be the gateway into Africa,” Kuria Kimani is the chairperson of Parliament’s Finance Committee. according Reuters is a leading news service. “Most young people between 18 and 35 are using virtual assets for trading, payments, or investment.”
Kenya’s crypto-uncertainty
After years of insecurity, the law is finally here. Kenya’s crypto sectorPlatforms like Binance or Paxful operate without any clear regulations.
Acts require all service providers to have a valid license, audited financial records and comply with capital and cybersecurity regulations. Illegal operations are now illegal.
Bitcoin users are able to benefit from the technology. Now, licensed platforms are required to segregate customer funds, keep adequate reserves and protect client data.
It is a requirement of the law that strict Know-Your-Customer To stop money laundering, the government has implemented KYC checks, records and reporting of suspicious transactions. The penalties for violating the law could be up to KES 20,000,000 ($130,000) in fines or prison.
Kenya now joins South Africa in establishing a crypto-licensing regime by 2023. Analysts believe the new law will help to legitimize digital currencies in East Africa’s biggest economy and attract investment.
In Kenya, the use of crypto has increased in recent years. According to ChainalysisKenya was ranked 4th in Africa in terms of transaction volume from July 2024 to June 2025. It received nearly $20 billion worth of crypto assets.
It is also home to a strong digital finance culture. More than 96% of household use M-PESA is a mobile payment platform which has helped to make digital payments more popular.
Even so, it could be a problem for smaller operators. The costs of licensing and the compliance requirements may drive some informal and local traders off the market.
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Source: bitcoinmagazine.com
