Kenya has introduced its first major crypto regulation bill to oversee digital assets like cryptocurrencies, stablecoins, and digital wallets. The Virtual Asset Service Providers Bill 2025 aims to bring order to the country’s fast-growing crypto market and protect investors from scams and fraud.
The crypto regulation bill will create a dual regulatory system. The Central Bank of Kenya (CBK) will control crypto wallets, stablecoin issuers, and payment processors, while the Capital Markets Authority (CMA) will manage crypto exchanges, token platforms, brokers, and advisors.
If the law passes, companies handling crypto services in Kenya must apply for licenses and follow strict rules. This includes platforms that issue digital coins through Initial Coin Offerings (ICOs). They’ll need to get approval from the CMA, explain their projects clearly, and meet rules similar to Initial Public Offerings (IPOs) in the stock market.
ICOs and Tokenisation Under Watch
For the first time, ICOs in Kenya will be regulated. This change follows several failed or fake coin launches that led to heavy losses for investors.
The bill will also regulate tokenization, which is the process of turning real-world assets like land or artwork into digital tokens. Tokenization platforms must register with the CMA and explain how they value store, and transfer these assets. This can help more people invest in assets like land, but it also raises questions about safety and fraud.
Stablecoin Rules and Heavy Penalties
Stablecoin issuers will need special licenses and must follow strict rules on how they manage their reserves. They must also allow regular audits. These changes are meant to reduce risk, especially as more Kenyans use stablecoins for payments and remittances.
Anyone who breaks the new rules could face big penalties. Fines could range from KES 3 million ($23,000) to KES 20 million ($155,000). Offenders might also face jail time and be permanently banned from working in the crypto industry.
A Big Shift in Kenya’s Crypto Policy
This bill shows a huge change from Kenya’s earlier stance on crypto. In 2015, the CBK warned people not to use cryptocurrencies, saying they were risky and unregulated.
Now, Kenya is one of Africa’s top crypto markets. A 2023 report by FSD Africa revealed that 47% of Kenyan consumers own crypto, and stablecoin transactions in Africa topped $30 million in just one year.
If this law passes, it could increase trust among investors and bring more innovation to Kenya’s digital economy. But its success depends on how well the regulators enforce it and how quickly they adapt to changes in the crypto world.
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