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Kenya is one of Africa’s most active cryptocurrency markets. An estimated six million Kenyans hold digital assets, and between July 2024 and June 2025, the country received approximately USD 19 billion in cryptocurrency inflows, making it the largest virtual asset market in East Africa. Despite this scale of market activity, the regulatory framework governing virtual assets has, until recently, remained underdeveloped.
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For much of this period, the sector operated in a regulatory grey area. In 2015, the Central Bank of Kenya (the CBK) issued Banking Circular No. 14 of 2015 warning commercial banks, mortgage finance companies and microfinance banks against dealing in virtual currencies or transacting with entities involved in cryptocurrency activities. While the circular was not directed at the general public, it effectively limited the sector’s access to formal banking services, creating a practical barrier to participation in Kenya’s regulated financial system.
The regulatory position began to shift in 2023 with the introduction of the digital asset tax under the Finance Act, 2023, which represented the first formal legislative recognition of the commercial significance of virtual assets in Kenya. This was followed by the development of the National Policy on Virtual Assets and Virtual Asset Service Providers. These developments culminated in the enactment of the Virtual Asset Service Providers Act, 2025 (the VASP Act), which received Presidential assent on 15 October 2025 and entered into force on 4 November 2025.
On 22 July 2026, the Cabinet Secretary for the National Treasury gazetted the Virtual Asset Service Providers Regulations, 2026 (the Regulations), completing the regulatory framework introduced by the VASP Act.
The Regulations provide the detailed rules governing the licensing, operation and supervision of virtual asset service providers (VASPs) in Kenya, covering activities ranging from virtual asset exchanges and custodial wallet services to stablecoin issuance, tokenisation platforms and virtual asset investment services.
This publication is the first in a series examining Kenya’s new regulatory framework. It provides a high-level overview of the new regime and its salient features, laying the foundation for the series that will explore key aspects of the framework in greater detail.
Click here to download and read the full article.
Should you require more information about this series, please do not hesitate to contact Sonal Tejpar, Shellomith Irungu, James Mungai or Abdulrahman Faiz.