Treasury Unveils Draft Rules to Regulate Kenya’s Crypto Industry Under 2026 VASP Regulations

The National Treasury has released draft Virtual Asset Service Providers (VASP) Regulations 2026, introducing stricter rules aimed at protecting Kenya’s rapidly growing cryptocurrency sector.

The draft outlines how crypto businesses—including exchanges, wallet providers, and other intermediaries—could be licensed and regulated. The Treasury says the move seeks to protect consumers, combat financial crimes like money laundering, and formalise a largely unregulated sector.

“The Regulations are issued pursuant to the Virtual Asset Service Providers Act, 2025 (Act No. 20 of 2025) to operationalise the Act, which provides a legal framework for licensing and regulating VASPs in and from Kenya,” the notice states.

Key Requirements for VASPs

• Only local companies are eligible for licensing; foreign companies must first obtain a compliance certificate.
• Providers must maintain a physical office in Kenya, and directors and senior officers will undergo background and competence checks.
• Issuers must hold reserves in highly liquid, low-risk assets, including cash, central bank deposits, short-term government securities (≤90 days), and repurchase agreements (≤7 days).
• Stablecoin issuers must keep at least 30% of customer funds in segregated accounts in Kenyan commercial banks, with the remainder in secure, low-risk assets.

New Fees and Restrictions

• Token issuance platforms: 0.05% transaction fee per trade.
• Virtual asset offerings: 0.5% of the value of a successful offering.
• Certain high-risk activities are banned, including transactions that hide participants’ identities.

Why It Matters

Kenya is one of Africa’s most active crypto markets, driven by widespread mobile money use and a young, tech-savvy population. Estimates suggest Kenyans hold USD 1.2 trillion (Ksh155 trillion) in virtual assets. Regulators say clear rules are needed to protect consumers and safeguard the financial system.

If adopted, the regulations will reshape crypto operations in Kenya, especially for stablecoins and tokenised assets, while aligning the country with global digital finance standards.

Public Participation

The Treasury has opened public consultation forums in Nairobi, Mombasa, Kisumu, and Eldoret, inviting comments from stakeholders. Consultations will run through April, after which submissions will be reviewed before the regulations are finalised.