Kenya advances VASP rules to license crypto firms

On April 11, Kenya’s National Treasury closed stakeholder submissions on the draft Virtual Asset Service Providers (VASP) Regulations, 2026. The draft is intended to implement the Virtual Asset Service Providers Act, 2025, and to set formal entry and supervisory rules for digital-asset businesses operating in Kenya.

The regulations target companies that deal in cryptocurrencies, tokenized assets and stablecoins. They lay out licensing requirements, ownership suitability tests and minimum capital thresholds for operators seeking authorization to provide virtual asset services.

The draft requires corporate governance standards for boards and senior managers, including fit-and-proper assessments. Firms would need to adopt risk-management policies and implement anti-money-laundering and counter-terrorist-financing controls, including client identification and transaction monitoring.

Consumer protections in the draft include mandatory disclosures on product features and fees, rules for transparent pricing and safeguards for client funds held by service providers. Market conduct measures would require due diligence for asset listings, ongoing monitoring of trading activity and provisions intended to prevent market manipulation and insider trading.

Supervision provisions call for periodic reporting, independent audits and baseline cybersecurity measures. Regulators would use a mix of on-site inspections and off-site supervision to enforce compliance and assess operational and financial risks.

Oversight responsibilities are expected to be shared between the Central Bank of Kenya and the Capital Markets Authority, reflecting the different functions covered by the regulations. The Treasury will review consultation feedback and refine the draft before finalizing the rules and setting a timeline for licensing.

The consultation occurred as use of digital assets has risen across the region. High cross-border transaction costs, delays in transfers and limited access to stable foreign currencies have been cited as factors behind increased adoption of crypto tools for payments and savings in parts of Sub-Saharan Africa.

Once finalized, the VASP regulations will operationalize the 2025 Act and create licensed pathways for firms that meet the proposed capital, governance and compliance requirements.

In a public statement, the Treasury wrote: “Kenya is building a trusted framework that balances innovation with financial stability.”