Kenya Introduces New Virtual Asset Service Providers Bill 2025 to Regulate Cryptocurrencies

Kenya’s National Assembly has received the Virtual Asset Service Providers Bill, 2025, introduced by Majority Leader Kimani Ichungwa. The bill aims to enhance oversight of cryptocurrency transactions, targeting tax evasion, fraud, and cybercrime by identifying legitimate virtual asset owners.

Key Objectives of the Bill

• Combatting Financial Crime: The legislation seeks to align Kenya with global anti-money laundering (AML) standards, helping the country exit the Financial Action Task Force’s (FATF) grey list.
• Transparency Measures: It mandates full disclosure of transaction details and participant identities, banning anonymity-enhancing services.
• Licensing Framework: Virtual asset service providers (VASPs) will require licensing, with penalties for non-compliance, including failure to grant regulators real-time access to transaction records.

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Notable Changes from the 2024 Draft

• Regulatory Clarity: Oversight of digital wallets is assigned to the Central Bank of Kenya (CBK), while cryptocurrency exchanges and investments fall under the Capital Markets Authority (CMA).
• Stablecoins and ICOs: Stablecoin issuances will be regulated by the CBK, and initial coin offerings (ICOs) by the CMA.
• Tokenized Assets: The bill introduces provisions for token issuance platforms, enabling secondary trading of tokenized real assets.

Penalties and Compliance

The 2024 draft proposed a KSh 150,000 fee and daily penalties for non-compliance, but these have been omitted in the 2025 version. Instead, the focus shifts to stricter governance, including:

• Transaction Limits: Individual transactions exceeding KSh 3 million and corporate transactions over KSh 10 million will face scrutiny.

Regional Context

Kenya’s move follows similar regulatory efforts in Africa, such as South Africa’s review of 36 crypto license applications in December 2025. The bill reflects growing recognition of cryptocurrency’s role in finance and gaming, as highlighted in recent discussions on Africa’s digital economy.

This legislation marks a significant step toward formalizing Kenya’s crypto landscape, balancing innovation with consumer protection and financial integrity.