Table of Contents
TL;DR,
- Under the Kenya VASP Act, Kenya replaced the 3% Digital Asset Tax with a 10% excise on exchange fees; regulators also confirm no VASP is licensed yet.
- CBK will oversee payment-focused VASPs; CMA handles securities-like tokens. Regulations are pending, so firms should prepare AML, governance, and disclosure programs now.
- Kenya is shifting from ambiguity to structured oversight with strict AML, cybersecurity, and fair-marketing expectations; centralized platforms must comply while DEXs may remain outside immediate scope.
The Kenya VASP Act has officially shifted into high gear with its main regulators issuing a notice for the active commencement of applications. The CBK-CMA joint statement clarified that the issuance will only begin after the regulations are issued by the Cabinet Secretary, National Treasury; for now, no VASP has been licensed under the Act.
What the Kenya VASP Act changes today
The official announcements clarified several critical factors that local and international participants need to understand.
First, as per the Kenya VASP Act, the CBK and CMA are responsible for licensing, supervising, and regulating all virtual asset providers operating within or from Kenya’s borders.
The notice also highlights Kenya’s strict stance over providers that violate any AML/CFT laws dictated within the regulation. Growing concerns have predicated this narrative with the most recent case within Kenyan borders.
The CBK-CMA joint announcement was the official green light indicating that the ACT is fully active, and the Cabinet Secretary for National Treasury is currently developing implementing regulations based on advice from both regulators.
Official CBK notice
Recently, digital assets have emerged as a preferred medium for cross-border transactions, online payments, alternative income streams like trading, and even for hedging against Kenya’s slow inflation rate. This dependency isn’t without its drawbacks.
Crypto scams, tax evasion cases, and AML cases have cropped up, and Kenya keeps finding its way into investigator lists of areas. In the recent Joint Financial Sector Regulators Forum, regulators warned that reliance on common third‑party technology providers can create dangerous concentration risks.
VASP licensing in Kenya: scope, expectations, and early prep
The Kenya VASP Bill is mostly about the following:
- Exchanges, wallet providers, and other VASPs must obtain permission.
- Anti-money laundering and counter-terrorism financing controls, such as KYC and customer due diligence, that follow global standards.
- Strong governance, transparency, and protection for consumers.
- In policy documents from 2025, VASPs are also expected to have a physical presence in Kenya and put in place cybersecurity and fair marketing protections.
Companies getting ready for the VASP licensing in Kenya should start making plans for risks, writing down their anti-money laundering and counter-terrorism financing procedures, and building their disclosure practices now.
The Central Bank of Kenya focuses on virtual asset services that function primarily as payment mechanisms or store-of-value instruments. This generally stems from its authority under the National Payments Systems Act, which it has interpreted to include digital payment platforms. Any firm focused on payment services, digital wallets, or cryptocurrency exchanges facilitating fiat-to-crypto conversions will have to answer to the CBK for a VASP license.
The Capital Markets Authority takes jurisdiction when virtual assets resemble securities or investment contracts. According to the VASP licensing Kenya rules, the CMA will oversee platforms that provide tokens seen as securities, initial coin offerings that are treated as public offerings, and any virtual asset services that include investment advice or managing portfolios.
Crossing the Regulatory Hurdle
The overall posture of CBK crypto regulation has shifted from a gray zone to adoption. While the notion of crypto becoming a legal tender has been thoroughly crushed, this new addition promises a more positive outlook for Kenya.
Global blockchain organizations such as Sui, Base, Lisk, Scroll, and Ethereum are well aware of Kenyans’ passion and innovation. Adoption has shifted from using cryptocurrency to creating local alternatives that bridge the gap.
For the most part, crypto in Africa doesn’t have the same metrics as first-world continents because Africans focus more on utility. Local innovators are bridging that gap with startups like Swypt, Edenfi, and others providing access without the complexity. These are early signs of adoption, especially with most solutions offering cheaper alternatives to global access.
These facts, coupled with the risk of AML cases, have forced Kenyan regulators to fast-track the regulatory safety net its economy requires. Tax policy has also evolved: Kenya replaced a 3% Digital Asset Tax on gross transaction value with a 10% excise duty on exchange fees, shifting the compliance burden to platforms. As CBK crypto regulation converges with the Act, the market gets clearer lines: who can operate, under what standards, and with which protections.
Currently, although we do not have a precise timeline for when Kenya will begin licensing VASPs, we can confirm that the process is in progress. Soon, local startups will no longer need to fear unintentionally offending regulators, as operating outside their jurisdiction will become nearly impossible. This is only applicable if you are a DEX.
