Kenya has officially ushered in a new era of digital assets. President William Ruto signed the Virtual Asset Service Providers Act 2025, giving the country the first comprehensive cryptocurrency regulatory framework.
The new law licenses and regulates virtual currency exchanges, wallet providers, brokers and payment processors operating in or in Kenya. The fast-growing sector will also come under the supervision of two major regulators: the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA).
Under the law, the CBK will supervise payment processors and stablecoin issuers, while the CMA will supervise trading platforms, investment advisors and asset managers. Both agencies will now be responsible for ensuring compliance with anti-money laundering and consumer protection standards.
“We hope that Kenya can become a gateway to Africa,” said Kuria Kimani, chair of the parliamentary finance committee, as reported by Reuters. “Most young people between the ages of 18 and 35 use virtual assets for transactions, payments, and investments.”
Kenya and crypto uncertainty
The law comes after years of uncertainty for Kenya’s cryptocurrency sector, where platforms such as Binance and Paxful have operated without clear rules.
The law requires all providers to be licensed, maintain audited records, and meet capital and cybersecurity requirements. Unauthorized operation is illegal.
For Bitcoin users, the benefits outweigh the costs. Licensed platforms are now required to segregate customer funds, maintain adequate reserves, and protect customer data.
The law requires strict know-your-customer (KYC) checks, record-keeping and reporting of suspicious transactions to curb money laundering and terrorist financing. Violations could result in a fine of up to KES 20 million ($130,000) or imprisonment.
The move puts Kenya in line with South Africa, which established a crypto licensing regime in 2023. Analysts say the law could attract new investment and help legalize digital assets in East Africa’s largest economy.
The use of virtual currencies in Kenya has rapidly increased in recent years. According to Chainalysis, Kenya ranked fourth in Africa in terms of trading volume from July 2024 to June 2025, receiving approximately $20 billion in crypto assets.
The country also has a strong digital financial culture. More than 96% of households use M-PESA, the mobile money platform that paved the way for digital payments adoption.
Still, the law could pose challenges for small businesses. Licensing costs and compliance obligations may force some local exchanges and informal traders to exit the market.
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