The National Treasury of Kenya has released the Draft Virtual Asset Service Providers Regulations, 2026, for public consultation. This release, announced in mid-March 2026, represents a pivotal advancement in implementing the Virtual Asset Service Providers Act, 2025, which received presidential assent in late 2025 and came into force shortly thereafter. The Act established the foundational legal framework for regulating virtual assets in Kenya; these draft regulations now provide the operational details needed to make that framework fully effective.
Crafted through a collaborative multi-agency process involving the National Treasury, the Central Bank of Kenya (CBK), and the Capital Markets Authority (CMA), the draft regulations aim to strike a careful balance. They seek to promote innovation in Kenya’s vibrant fintech and blockchain sector—already a leader in mobile money and digital finance—while mitigating risks such as money laundering, consumer harm, and financial instability. The proposals align closely with international standards, particularly those set by the Financial Action Task Force (FATF), while remaining responsive to local market dynamics.
Key provisions in the draft include:
- Clear licensing and authorisation processes for Virtual Asset Service Providers (VASPs), encompassing crypto exchanges, custodial wallet services, payment processors, and other intermediaries.
- Requirements for robust governance, minimum capital adequacy, and continuous compliance monitoring.
- Comprehensive consumer protection mechanisms alongside rules ensuring fair and transparent market conduct.
- Detailed requirements for stablecoin issuance, mandating full reserve backing, regular audits, and public disclosure of reserves.
- Forward-looking rules enabling the tokenisation of real-world assets, which could unlock new opportunities in real estate, commodities, and securities.
- Stringent cybersecurity standards, incident reporting obligations, and anti-money laundering/counter-terrorism financing measures.
The Virtual Assets Association of Kenya (VAAK), as the leading voice for the digital asset ecosystem, has expressed strong encouragement. Many of the industry’s prior recommendations appear reflected in the draft, highlighting the success of ongoing public-private collaboration. Still, VAAK emphasizes that the regulations are not yet final—continued input from stakeholders is crucial to ensure the framework nurtures responsible growth without imposing undue burdens that could hinder Kenya’s potential as an African digital asset hub.
Public participation is actively invited and essential at this stage. Nationwide Public Participation Forums are scheduled from 30th March to 10th April 2026, providing platforms for in-person discussions. All written comments must be submitted by 10th April 2026 to [email protected] or [email protected].
This is an open invitation to Kenya’s crypto community: exchanges, fintech innovators, blockchain developers, builders, investors, legal professionals, and aspiring VASPs should seize this opportunity. Thoroughly review the draft, offer constructive and evidence-based feedback, and help refine a regime that protects users while positioning Kenya competitively on the global stage.
For those already engaged or planning to enter the virtual asset space, consider joining the Virtual Assets Association of Kenya (VAAK). Membership provides enhanced policy influence, regulatory guidance, networking, and unified industry representation. By working collectively, stakeholders can help forge a secure, innovative, and inclusive digital asset ecosystem—one that drives economic inclusion, attracts investment, creates jobs, and safeguards consumers in equal measure.
