Impact Of The Virtual Asset Service Providers Act, 2025 On Kenya's Digital Asset Ecosystem

The Virtual Asset Service Providers Act, 2025 (the Act) came into force following presidential assent on 15 October 2025, marking a crucial evolution in Kenya's regulatory approach to virtual assets. The Act departs from the position established in 2015 by the Central Bank of Kenya (CBK) in its Banking Circular, which advised that virtual currencies were unregulated, not legal tender, and cautioned financial institutions against transacting with entities dealing in such currencies.

This landmark piece of legislation establishes a comprehensive legal framework aimed at licensing and regulating the activities of Virtual Asset Service Providers (VASPs) operating in and from Kenya. The Act is structured to define the confines of regulated activity, designate supervisory authorities, impose licensing and fit-and-proper requirements, and create an enforcement regime that integrates VASPs into the existing regulatory architecture.