Kenya has taken its most definitive step yet toward bringing cryptocurrency businesses under formal legal control. The country gazetted the Virtual Asset Service Providers (VASP) Regulations, 2026 on Friday, July 24, publishing them in Kenya Gazette Supplement No. 185 under Legal Notice No. 134 — completing the implementation of the VASP Act that President William Ruto signed into law in October 2025.
The regulations establish, for the first time, a licensing regime that gives Kenyan regulators the legal authority to approve and supervise firms operating across the digital asset sector — including cryptocurrency exchanges, wallet providers, stablecoin issuers, and token issuance platforms.
A Market Too Big to Leave Unregulated
The timing is hard to argue with. Kenya recorded approximately $19 billion in crypto inflows between July 2024 and June 2025, according to blockchain analytics firm Chainalysis. That figure placed Kenya second in East Africa by transaction value, trailing only Ethiopia — making it one of the continent's most active digital asset markets.
Given that scale, bringing exchanges and service providers under regulated oversight was not a policy experiment. It was overdue.
What the Rules Actually Require
The framework is broad. Any firm serving Kenyan customers — including foreign providers with no physical presence in the country — must obtain a license if they actively target Kenyan users or derive economic benefit from the market. That extraterritorial reach is one of the regulation's most significant provisions.
Licensed firms are required to meet governance and capital thresholds, implement anti-money laundering and cybersecurity controls, safeguard customer assets, retain transaction records for a minimum of seven years, and submit regular reports to their respective regulatory bodies. Advertising, market conduct rules, and enforcement mechanisms are also covered.
The regulations additionally govern stablecoins, initial coin offerings (ICOs), tokenised real-world assets, and digital wallets — effectively touching nearly every corner of the digital asset ecosystem.
Two Regulators, Divided Responsibilities
Oversight is not concentrated in a single body. Under the framework, the Central Bank of Kenya (CBK) will supervise virtual asset-to-fiat conversion services and stablecoin issuers. The Capital Markets Authority (CMA) takes charge of exchanges, token issuance platforms, ICOs, and tokenisation activities.
The CBK had already started preparing for this shift. In April, the bank advertised vacancies for roles specifically covering licensing under the incoming regime — a signal that implementation planning was well underway before the regulations were formally gazetted.
Industry Pushback During Consultation
The final regulations followed a four-month public consultation process that the National Treasury launched in March. The process invited comments from crypto firms, consumers, and broader stakeholders.
Crypto industry participants did not hold back. Several firms argued that some of the proposed capital and compliance requirements could price smaller operators out of the formal market entirely — effectively concentrating the regulated sector among well-funded, larger players. Government officials engaged the industry through multiple consultation sessions before locking in the final text.
Whether those concerns were fully addressed in the final rules will become clearer as firms begin the licensing process. For now, Kenya's digital economy has a formal regulatory foundation for crypto — and the clock for compliance has started.