Kenya seeks public input on draft crypto licencing regulations

Kenya’s National Treasury has opened public consultation on draft regulations that will govern how cryptocurrency and digital asset businesses operate in the country, the final step before the country’s landmark virtual assets law takes full effect.

Cabinet Secretary John Mbadi published the notice on MyGov, a state-owned newspaper, on Tuesday, inviting public comment on the draft Virtual Asset Service Providers Regulations, 2026, until April 10, 2026, with a series of nationwide forums scheduled from March 30.

Public consultation on the draft rules is a critical next step as Kenya’s crypto law moves toward full implementation. The process gives industry stakeholders, regulators, and consumers a chance to press for clarity on licencing terms, supervision, and penalties before the regulations are signed off.

“The National Treasury through a Multi-Agency Task Force and in consultation with the Central Bank of Kenya (CBK) and Capital Markets Authority (CMA) has developed the draft Virtual Asset Service Providers Regulations, 2026, and Regulatory Impact Statement (RIS),” Mbadi said in the notice.

He added that the rules are issued under the Virtual Asset Service Providers (VASP) Act “to operationalise the Act whose objective is to provide for the legal framework for licencing and regulating the activities of Virtual Asset Service Providers in and from Kenya.”

The regulations will operationalise the VASP Act, which President William Ruto signed into law in October 2025, and which came into force on November 4, 2025.

The push to regulate Kenya’s digital asset sector has been years in the making. The CBK first warned the public against virtual currencies in 2015, and the CMA followed in 2018, leaving the industry in a prolonged regulatory grey zone until the government pivoted to formal oversight in 2023 with the introduction of a 3% Digital Asset Tax.

In September 2023, the government formed a multi-agency technical working group to design the licencing framework, which is now out for consultation. In 2025, Kenya scrapped the controversial 3% Digital Asset Tax on the gross value of crypto transactions and replaced it with a 10% excise duty on the fees charged by virtual asset providers.

Kenya is East Africa’s largest cryptocurrency market. Between July 2024 and June 2025, Kenyans received about $19 billion in cryptocurrency inflows, according to blockchain analytics firm Chainalysis, and more than six million Kenyans use crypto, according to global payments research firm Triple-A.

The scale of that activity, largely unregulated until last year, is part of why the stakes around the incoming licencing framework are high for operators and users.

The industry is already organising ahead of formal licencing. In December 2025, more than 50 crypto firms formed the Virtual Asset Association of Kenya (VAAK), a lobby group designed to engage the CBK and CMA on proposed rules and advocate for a framework that balances compliance with innovation.

VAAK has since partnered with Africa Digital Assets, a digital assets policy research firm that works with banks, regulators, and industry associations, to coordinate regulatory engagement across the industry.

Under the draft framework, the CBK will oversee payment-related crypto firms, including stablecoin dealers and conversion rails, while the CMA will supervise exchanges, brokers, and tokenisation platforms.