Kenya Approves Virtual Asset Bill to Regulate Cryptocurrencies

Highlights:

• Kenya enacts its first comprehensive law to regulate digital assets and crypto trading.
• The law brings Kenya in line with global anti-money-laundering and financing standards.
• It requires crypto firms to obtain licenses, protect customer funds, and follow strict compliance rules.

Kenya’s parliament has passed the Virtual Asset Service Providers Bill, the country’s first full law to regulate cryptocurrencies and other digital assets. A senior member of parliament said on Monday that the new law aims to attract more investment in the digital asset sector by setting clear and transparent rules for how the industry should operate.

As chairman of the Finance Committee in the National Assembly, Kimani announced that Kenyan lawmakers approved the Virtual Asset Service Provider Bill last Thursday. He explained that the new legislation aims to address challenges stemming from the absence of clear regulations in Kenya’s crypto sector. Kimani noted that the law brings Kenya closer to countries like South Africa, which already have established rules for the digital asset industry. He added that the bill now awaits President William Ruto’s signature to become law.

The bill states that the central bank will be in charge of giving licenses for issuing stablecoins and other virtual currencies. However, the Treasury will still have the power to take back this authority if needed. The capital markets regulator will oversee crypto exchanges and other trading platforms.

According to Reuters, Kenya’s parliament has passed the Virtual Asset Service Providers Bill to establish a regulatory framework for the digital asset sector, aiming to attract investment and standardize trading practices. The bill authorizes the central bank to license the…

— Wu Blockchain (@WuBlockchain) October 13, 2025

Kenya Aims to Become Africa’s Crypto Hub

The Kenyan MP said that they hope Kenya can become the main entry point into Africa, noting that many young people aged 18 to 35 are now using virtual assets for trading, making payments, investing, and doing business. In other parts of Africa, the country is testing a $5.5 billion real-world asset tokenization plan along with a trial of a central bank digital currency. 

NEW: Uganda launches a #CBDC pilot as part of a $5.5B #tokenization initiative with Global Settlement Network and Diacente Group 🪙🌍 pic.twitter.com/SAlJZoEexm

— Coinpaper (@coinpapercom) October 9, 2025

Kenya’s decision to create crypto laws comes as many countries prepare for the growth of U.S. dollar-backed stablecoins. The Financial Stability Board has warned that these stablecoins could weaken the currencies of less developed countries.

Kenya Introduces Strong Crypto Rules

As the digital asset industry has expanded over the years, governments have been worried about how to stop criminals from using the anonymity of these systems for illegal activities. Kimani said that lawmakers developed the new law using ideas and examples from the U.S. and the UK.

The new bill aligns Kenya with global anti-money-laundering and counter-terrorism financing standards while avoiding bureaucratic expansion. It requires all crypto firms to obtain licenses from the relevant regulator, segregate customer assets, and hold accounts in Kenyan banks. Companies must also appoint compliance officers, undergo independent IT audits, and implement detailed anti-money-laundering and data protection frameworks.

When the bill was submitted, stakeholders suggested rules for foreign stablecoins. Only trusted countries can enter, with strict checks and rules. Issuers must keep full reserves, use licensed local banks, and ensure people can get their money anytime. The final bill treats stablecoins like other crypto assets, following the same rules, without covering them in much detail.