Kenya's Legislators Pass Crypto Bill to Boost Investments and Oversight

Kenya’s parliament has passed a bill to regulate digital currencies and virtual assets, moving the country closer to formal oversight of its fast-growing crypto market. The Virtual Asset Service Providers Bill, approved last week, now awaits President William Ruto’s signature to become law.

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The legislation sets out clear licensing rules for crypto issuers and exchanges, a development that aims to improve investor confidence and attract fresh investments into Kenya’s fintech sector.

This move could position Kenya as a key hub for crypto innovation in Africa, as the country seeks to attract more investments amid a booming digital finance environment.

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A Dual Regulatory Structure

The Virtual Asset Service Providers Bill 2025 delineates responsibilities between two main bodies. The Central Bank of Kenya will oversee the licensing of stablecoins and other virtual assets, while the Capital Markets Authority will regulate exchanges, brokers, and trading platforms.

Parliament passes virtual asset law to boost crypto investments https://t.co/zPLOL69ZTF

— Citizen TV Kenya (@citizentvkenya) October 14, 2025

This approach replaces an earlier proposal for a separate regulatory authority, streamlining supervision under existing agencies with mandates adjusted to cover the crypto sector. Operators will face strict requirements, including client fund segregation and compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term with anti-money laundering protocols.

As digital assets gain global traction, governments struggle to balance innovation with risk management. Kenya’s legislation draws inspiration from regulatory models in the US and the UK, aiming to reduce vulnerabilities such as fraud and money laundering often associated with anonymous crypto transactions.

Strategic Importance Amid Stablecoin Surge

This law coincides with a global surge in US dollar-backed stablecoins. Regulators worldwide warn that these stablecoins can destabilize the currencies of less developed economies. Kenya’s law, by bringing stablecoin issuance under central bank oversight, seeks to protect monetary stability while fostering innovation.

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Kenya’s population, especially younger demographics aged 18 to 35, increasingly uses virtual assets for trading, payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term, and business. The precedent set by Kenya’s mobile financial service innovations, notably M-Pesa, highlights the country’s readiness to adopt new financial technologies.

While virtual assets have grown globally over the past decade, a lack of regulation has sparked concerns. With this new bill, Kenya addresses those regulatory gaps, aiming to remove the sector from a prior gray area and bring it in line with international standards.

Early this year, Kenya stepped up its plans to legalize cryptocurrencies and expand its digital economy. Treasury Cabinet Secretary John Mbadi highlighted the potential of virtual assets for cross-border transactions and investment, signaling a shift from the country’s previously restrictive approach to digital currencies.

🔥 JUST IN: Kenyan Finance Minister John Mbadi reveals plans to draft legislation to legalize cryptocurrency pic.twitter.com/nldurpauK8

— Crypto Briefing (@Crypto_Briefing) January 10, 2025

Despite a longstanding ban, cryptocurrency use has grown underground. The government now intends to create a regulatory framework to oversee virtual assets (VA) and virtual asset service providers.

Mbadi emphasized the importance of balancing innovation with oversight, noting that the growth of digital assets has brought both opportunities and challenges to Kenya’s financial system.