Kenya has officially entered a new era for digital assets. President William Ruto signed the Virtual Asset Service Providers Act, 2025, giving the country its first comprehensive crypto regulation framework.
The new law licenses and regulates crypto exchanges, wallet providers, brokers, and payment processors operating in or from 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).
Under the Act, the CBK will supervise payment processors and stablecoin issuers, while the CMA will oversee trading platforms, investment advisers, and asset managers. Both agencies will now be responsible for ensuring compliance with anti-money laundering and consumer protection standards.
“We are hoping that Kenya can now be the gateway into Africa,” said Kuria Kimani, chair of the parliamentary finance committee, according to Reuters reporting. “Most young people between 18 and 35 are using virtual assets for trading, payments, or investment.”
Kenya and crypto uncertainty
The law comes after years of uncertainty for Kenya’s crypto sector, where platforms like Binance and Paxful have operated without clear rules.
The Act requires all providers to obtain a license, maintain audited records, and meet capital and cybersecurity requirements. Unlicensed operations will now be illegal.
For Bitcoin users, the benefits outweigh the costs. Licensed platforms must now segregate client funds, hold adequate reserves, and protect customer data.
The law mandates strict Know-Your-Customer (KYC) checks, record-keeping, and suspicious transaction reporting to curb money laundering and terrorism financing. Violations could lead to fines of up to KES 20 million ($130,000) or imprisonment.
The move places Kenya alongside South Africa, which established its crypto licensing regime in 2023. Analysts say the law could attract new investment and help legitimize digital assets in East Africa’s largest economy.
Crypto use in Kenya has soared in recent years. According to Chainalysis, Kenya ranked fourth in Africa by transaction volume between July 2024 and June 2025, receiving nearly $20 billion in crypto assets.
The country also has a strong digital finance culture. Over 96% of households use M-PESA, a mobile money platform that has paved the way for digital payments adoption.
Still, the law could challenge smaller operators. Licensing costs and compliance obligations may force some local exchanges and informal traders out of the market.
