Kenya Delays Licensing of Cryptocurrency Firms Pending New Regulations
The Central Bank of Kenya (CBK) has confirmed that the licensing of Virtual Asset Service Providers (VASPs) in the country will not commence until the National Treasury issues fresh regulations to operationalise the Virtual Assets Service Providers Act, 2025.
In a public notice issued on Tuesday, November 18, the CBK revealed that Treasury Cabinet Secretary John Mbadi is drafting the regulations based on guidance from both the CBK and the Capital Markets Authority (CMA).
“Accordingly, the Cabinet Secretary, National Treasury, pursuant to the Act and upon the advice of CBK and CMA, is developing and shall issue Regulations for further guidance on implementation of the Act,” the CBK stated.
The announcement means that no firm is currently authorised to operate as a licensed VASP in or from Kenya, despite the Virtual Assets Service Providers Act, 2025, having come into effect. Both the CBK and CMA emphasised that no licences have yet been issued under the Act.
“Consequently, the licensing of VASPs will commence upon issuance of these Regulations. Currently, CBK and CMA have not licensed any VASPs under the Act to operate in or from Kenya,” the statement added.
The regulatory update follows the enactment of the Virtual Assets Service Providers Act, which took effect on November 4, after being gazetted on October 21. The legislation represents Kenya’s first comprehensive legal framework governing digital asset service providers, including token issuers, wallet operators, and cryptocurrency exchanges.
The Act introduces strict safeguards designed to prevent money laundering, terror financing, and other illicit activities within the digital asset sector. Licensing requirements will be determined by the specific activities a service provider engages in, as outlined in the Act’s First Schedule, which includes services such as crypto exchange operations and virtual asset transfers.
Officials say that once the regulations are gazetted, Kenya will be better aligned with international standards set by the Financial Action Task Force (FATF), a global body advocating for stronger oversight of digital asset markets.
The development comes as interest in cryptocurrencies continues to grow among Kenyan investors. According to estimates, Kenyans hold approximately USD 1.2 trillion (Ksh155 trillion) in virtual assets. The new legislation is expected to provide essential safeguards, offering reassurance to investors and businesses seeking to innovate within the country.
A January report by the International Monetary Fund (IMF) highlighted Kenya’s use of stablecoins to manage international debt during periods of US dollar shortages and to hedge against volatility in the Kenyan shilling, underscoring the increasing relevance of digital assets in the country’s financial ecosystem.
With regulations still pending, authorities have urged digital asset firms and investors to exercise caution and comply with existing financial laws until licensing frameworks are formally operational.
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Kenya Delays Licensing of Cryptocurrency Firms Pending New Regulations