In a bold move signaling Africa’s fintech ascent, Kenya’s President William Ruto signed the Virtual Asset Service Providers (VASP) Bill, 2025 into law on October 15, 2025. This pioneering legislation establishes the country’s first comprehensive framework for regulating cryptocurrencies, stablecoins, and virtual assets, shifting from informal trading hubs to a structured, investor-ready ecosystem. Kenya’s crypto journey has been explosive yet unregulated. With monthly stablecoin volumes exceeding $500 million via platforms like Binance and local innovators such as KotaniPay, the sector demanded clarity. Past hurdles—like the 2023’s 3% transaction tax—deterred growth and drew FATF scrutiny. The new law addresses this by prioritizing innovation, AML compliance, and consumer safeguards, drawing inspiration from U.S. and U.K. models to exit the global gray list.
Under the framework, the Central Bank of Kenya (CBK) licenses stablecoin issuers, mandating 100% collateral, full liquidity, and local custodians. The Capital Markets Authority (CMA) oversees exchanges and wallets, enforcing KYC, audited financials, and physical Kenyan presence for all VASPs—local or foreign. This multi-agency approach avoids bureaucratic overlap, replacing heavy taxes with lighter excise duties on fees.
The impacts are profound. By formalizing operations, Kenya aims to attract giants like Coinbase, positioning itself as Africa’s “crypto gateway” alongside South Africa. It fosters financial inclusion for millions reliant on mobile money like M-Pesa, while curbing illicit flows. Startups celebrate the regulatory clarity, though they urge flexible sub-rules to prevent offshoring.
Critics highlight implementation risks, but optimism prevails. This law could catalyze billions in investments, inspiring continent-wide adoption amid Africa’s $100B+ crypto trade. Kenya’s pivot from caution to embrace marks a watershed, blending tradition with blockchain for a prosperous digital future.