Banks Signal a Major Shift Toward Crypto Integration
Kenya’s financial sector is entering a new era, with 31% of banks preparing to support crypto transactions, according to a new Innovation Survey from the Central Bank of Kenya (CBK). The findings reveal that banks—both commercial and microfinance—are turning to crypto not only as a tool for innovation but as a way to expand financial access to the country’s vast unbanked population.
The CBK survey also found that banks are “highly likely” to engage in virtual asset activity, including Bitcoin, Ethereum, NFTs, and other digital tokens. Their interest has grown on the back of widespread usage in industries such as entertainment, finance, real estate, and digital art.
This evolution comes as the government begins backing crypto through regulation rather than criminalization, aiming to create an ecosystem that fosters both safety and innovation.
Demand for Regulation Surges as Crypto Use Rises
The urgency for regulatory clarity has been echoed by most banks. According to the CBK, 35% of institutions demanded frameworks for digital lending, open banking APIs, identity tools, and crypto governance. The government's past inaction on anti-money laundering laws saw Kenya grey-listed by the FATF in 2014. That black mark was tied to the absence of crypto monitoring mechanisms, creating a loophole that illicit actors could exploit.
Now, authorities are moving quickly to change course. The proposed Virtual Asset Service Providers Bill 2025 will require crypto firms to open local offices, appoint directors, and register with the Capital Markets Authority (CMA) before operating in the country.
Kenya Offers Crypto Tax Relief Amid Growing Industry Pressure
The Kenya Revenue Authority (KRA) is also rolling out a new crypto tax framework, which will include real-time tracking of blockchain transactions to combat fraud and enforce compliance. But the government isn’t just tightening the screws—it’s also offering incentives.
In response to industry backlash, the 3% digital asset tax introduced in 2023 has been cut in half. Under the 2025 Finance Bill, the new 1.5% levy will align with the standard turnover tax for small businesses, according to Cabinet Secretary John Mbadi.
This move followed widespread criticism from Kenyan crypto firms who argued the earlier rate would stifle innovation and drive activity underground.
Kenya Digital Exchange Pushes Blockchain into the Mainstream
In perhaps the most ambitious development yet, the Nairobi Securities Exchange (NSE) has partnered with DeFi Technologies to launch the Kenya Digital Exchange (KDX). The blockchain-based platform will enable the tokenization and trading of equities, commodities, ETFs, and debt instruments—a groundbreaking step toward digitized markets.
The KDX initiative shows that Kenya’s crypto evolution isn’t just happening at the grassroots. Institutional backing is growing, and with legislative support, the country could position itself as Africa’s leading blockchain hub.
While crypto adoption in Kenya still faces hurdles, the tone has changed dramatically. From banks and regulators to public exchanges and lawmakers, the message is increasingly clear: crypto is here to stay—and it’s going mainstream.
