Kenya Passes Historic Cryptocurrency Law to Boost Digital Asset Investments in Africa

Kenya’s parliament has passed groundbreaking legislation to regulate cryptocurrencies and digital assets, positioning the East African nation as a leader in blockchain governance and a potential magnet for billions in fintech investment.

The Virtual Asset Service Providers Bill, approved last week, makes Kenya one of the few African countries with a comprehensive legal framework for the digital asset market, according to Kuria Kimani, chair of the National Assembly’s finance committee. The bill now awaits President William Ruto’s signature to become law.

Under the framework, the Central Bank of Kenya will license stablecoins and virtual assets, while the Capital Markets Authority will oversee cryptocurrency exchanges and trading platforms. 

This dual regulatory model aims to balance innovation with consumer protection in the fast-growing sector.

Officials/Experts: “This legislation addresses concerns over the lack of clear regulations governing the crypto sector,” said MP Kuria Kimani, noting that many young Kenyans aged 18 to 35 are already trading and using virtual assets for payments. Regulatory clarity is expected to attract major international exchanges such as Binance and Coinbase.

Public sentiment: Digital assets enjoy strong popularity among young Kenyans, with the country ranked 21st globally for cryptocurrency adoption, according to Chainalysis. A 2024 Central Bank survey found nearly one-third of Kenyan banks ready to engage in virtual asset activities.

Regional/International: The IMF has urged Kenya to align its framework with global standards to combat money laundering and terrorism financing. Kenya now joins South Africa as one of the few African nations with comprehensive cryptocurrency regulations.

Kenya has long been a fintech pioneer in Africa, propelled by the success of M-Pesa, which serves millions regionally. In 2024, the country recorded the fourth-highest cryptocurrency adoption rate on the continent, trailing Nigeria, Ethiopia, and Morocco, and ranked 28th globally.

The legislation seeks to combat fraud and market manipulation while supporting Kenya’s removal from the FATF grey list, where it has been since February 2024. This follows the government’s 2023 introduction of a 15% tax on crypto trading under its revised Finance Act.

What’s Next

The law draws from U.S. and U.K. regulatory practices, employing a multi-agency approach that includes the Central Bank, Capital Markets Authority, Communications Authority, Competition Authority, and Data Protection Commissioner. The framework covers licensing, market conduct, data protection, and infrastructure development.

Kenya’s move comes as global adoption of U.S. dollar-backed stablecoins rises—a trend that regulators warn could impact developing economies. 

With this legislation, Kenya is poised to become Africa’s gateway for digital asset investment and cryptocurrency enterprises.