Kenya Nears Crypto Regulation With Virtual Asset Service Providers Bill, Could Affect Worldcoin and Exchanges

• Parliament enacted the Virtual Asset Service Providers Bill 2025; presidential assent is required to make it law.

• The bill assigns the Central Bank of Kenya to oversee fiat–crypto payment processors and the Capital Markets Authority to regulate brokers, advisers and digital asset managers.

• Kenya received nearly $20 billion in crypto value from July 2024–June 2025 and ranks third in Sub‑Saharan Africa for adoption (Chainalysis data).

Kenya crypto regulation: Parliament enacted the Virtual Asset Service Providers Bill 2025; presidential assent will enable CBK and CMA to license exchanges, wallets and payment processors. Read COINOTAG report.

By COINOTAG | Published: 2025-10-14 | Updated: 2025-10-14

What is the Virtual Asset Service Providers Bill 2025?

The Virtual Asset Service Providers Bill 2025 is legislation passed by Kenya’s parliament to establish a legal framework for licensing and supervising crypto service providers. The bill, now pending signature by President William Ruto, delineates roles between the Central Bank of Kenya and the Capital Markets Authority to regulate payment processors, exchanges, wallets and digital asset managers.

How will the bill divide regulatory responsibilities?

The law identifies two primary regulators. The Central Bank of Kenya will have exclusive oversight of payment processors that arrange conversions between fiat currency and virtual assets. The Capital Markets Authority will regulate brokers, investment advisors and digital asset managers. This dual‑regulator approach is intended to align oversight with existing financial market responsibilities while creating licensing requirements for service providers.

Why does this matter for Kenyan users and businesses?

The legislation aims to reduce misuse and create consumer protections while enabling legitimate market growth. Kenyan users—particularly those aged 18–35—rely heavily on virtual assets for trading, payments and investment, according to statements from parliamentarians. Formal licensing and supervision would require service providers to meet governance, anti‑money‑laundering and consumer‑protection standards enforced by the assigned regulators.

Context and supporting data

Crypto adoption in Africa has been expanding rapidly. Plain text Chainalysis reporting places Sub‑Saharan Africa high in regional adoption rankings; Kenya ranked fourth among African countries by total value received between July 2024 and June 2025, with nearly $20 billion in assets received during that period. Kenya’s growth in retail crypto activity is being matched by a policy gap—other regional markets, notably South Africa, have already implemented licensing regimes.

Parliamentary remarks attributed to finance committee chairman Kuria Kimani emphasise the demographic and economic motivations for regulation: many young people use virtual assets for commerce and investment and lawmakers see regulation as a route to position Kenya as a gateway into Africa’s digital‑asset economy (source: Reuters, quoted as plain text).

Industry commentary underscores the speed of reform required. Nic Puckrin, analyst and co‑founder of Coin Bureau, observed that South Africa’s earlier classification of crypto as financial products and subsequent licensing (initiated in 2023) has given it a regulatory lead, and that Kenya may need to move quickly to compete (source: Coin Bureau, quoted as plain text).

Kenya’s digital payments landscape is mature: 96% of households have used a mobile money service called M‑PESA, illustrating widespread familiarity with digital value transfer. The country has also hosted projects such as Worldcoin; public privacy concerns produced judicial scrutiny and a court order addressing the project’s practices (Worldcoin referenced as plain text).

Frequently Asked Questions

How will VASP licensing affect Kenyan exchanges and wallets long term?

Licensing will require exchanges and wallets to meet operational, governance and anti‑money‑laundering standards enforced by the Central Bank of Kenya and the Capital Markets Authority. Firms that comply gain legal certainty and access to formal banking rails; noncompliant providers face enforcement actions or prohibition.

Will this law immediately change how Kenyans use crypto?

Not instantly. The bill must receive presidential assent and regulators must publish licensing rules. Once implemented, expect phased enforcement and clearer pathways for licensed service providers to operate, improving safeguards and potentially broadening institutional participation.

Key Takeaways

• Legislative milestone: Parliament passed the Virtual Asset Service Providers Bill 2025; presidential assent will make it law and enable licensing.
• Dual regulator model: The Central Bank of Kenya will oversee fiat–crypto payment processors; the Capital Markets Authority will regulate brokers, advisers and digital asset managers.
• Market impact: Kenya’s strong retail crypto adoption and near $20 billion in received value signal significant commercial stakes; regulated licensing aims to balance market growth with consumer protections.

Conclusion

The passage of the Virtual Asset Service Providers Bill 2025 marks a significant step in Kenya crypto regulation, defining a framework that assigns oversight to the Central Bank of Kenya and the Capital Markets Authority. If signed by the president and implemented promptly, the law could provide legal clarity for exchanges, wallets and payment processors while strengthening consumer protections and anti‑money‑laundering controls. Stakeholders should monitor regulator rule‑making and licensing timelines for the next phase of implementation. COINOTAG will continue to report on developments and regulatory guidance.

Sources (plain text): Reuters, Chainalysis, Coin Bureau, Central Bank of Kenya, Capital Markets Authority. Additional reporting by Vince Dioquino.