Breaking: Kenya Approves Landmark Crypto Bill, Paving the Way for Africa’s Digital Future

Kenya Makes History With Digital Assets Bill

Kenya has officially entered the crypto regulation era. Parliament passed the Virtual Asset Service Provider Bill last Thursday, marking the country’s first legislative framework for digital assets and cryptocurrencies.

The bill - championed by Member of Parliament Kuria Kimani, chair of the Finance Committee - aims to establish clear rules for crypto firms and investors while promoting innovation and transparency in one of Africa’s fastest-growing digital markets.

If signed into law by President William Ruto, Kenya will join South Africa as one of the few African nations with a comprehensive crypto regulatory framework.

Aiming for Clarity and Investment

For years, Kenya’s booming crypto scene has grown in a legal grey zone, with no formal licensing or oversight. The new law seeks to fix that by assigning clear roles to government agencies:

• The Central Bank of Kenya (CBK) will license stablecoin issuers and oversee virtual currencies.

• The Capital Markets Authority (CMA) will regulate crypto exchanges and trading platforms.

• The National Treasury will retain the power to reassess regulatory authority as needed.

This framework directly addresses concerns raised by the Financial Sector Regulators Forum, which previously warned that overlapping jurisdictions could cause “legal ambiguity and enforcement challenges.”

Kimani said the bill borrows from U.S. and U.K. models, balancing investor protection with openness to innovation.

Encouraging Global Crypto Players

Kimani believes that clear rules will attract major crypto exchanges like Binance and Coinbase, which have previously held exploratory talks with Kenya’s government.

He emphasized that regulation will make Kenya more appealing to international firms seeking an African hub:

The move comes as stablecoin usage surges across Africa. Global regulators like the Financial Stability Board have warned that the rise of U.S. dollar-backed stablecoins could undermine developing nations’ currencies - making local oversight essential.

Tight Rules for Accountability and Transparency

To prevent abuse and ensure compliance, the new bill requires every licensed crypto firm to: 

• Maintain a physical office in Kenya.

• Appoint a board of at least three Kenyan-based directors.

• Segregate customer assets and hold accounts in Kenyan banks.

• Appoint compliance officers and undergo independent IT audits.

Lawmakers say these measures will curb shell companies and bring more transparency to an industry long dominated by offshore operators.

While some crypto advocates argue that physical offices are unnecessary for digital businesses, legislators insist that local accountability is key to consumer protection.

Aligning With Global AML and Stablecoin Standards

The Virtual Asset Service Provider Bill also aligns Kenya with global anti-money-laundering (AML) and counter-terrorist financing (CFT) standards.

The law mandates detailed AML frameworks, data protection compliance, and the recognition of vetted foreign stablecoins from approved jurisdictions - provided they maintain 100% collateral, use licensed Kenyan custodians, and guarantee full liquidity.

By integrating these international best practices, Kenya hopes to modernize its financial infrastructure without overregulating the industry.

Kenya’s Digital Leap Forward

Kenya, already a pioneer in mobile-based finance with M-Pesa, is now taking a bold step into the future of blockchain and digital assets. If implemented effectively, the new legislation could cement its role as Africa’s leading crypto and fintech hub.