- Kenya parliament passed the VASP bill; it now awaits the president’s signature.
- Central Bank to license stablecoin issuers; Capital Markets Authority to license exchanges.
- Seeks clear rules to attract fintech; draws on U.S./U.K. models and current 18–35 user trends.
Kenya parliament has moved the country a step closer to a formal digital-asset regime by passing the Virtual Asset Service Providers Bill, aiming to set clear, workable rules for cryptocurrencies, exchanges, and stablecoins. Legislators approved the measure last week, and the president now needs to sign it for it to become law. The bill responds to the growth of trading and payments among young adults aged 18 to 35, as well as repeated calls for clarity from local and global firms. Sponsors say the framework borrows tested approaches from the United States and Britain while fitting Kenya’s market. The goal is simple enough: protect users, support innovation, and reduce regulatory uncertainty that has slowed investment.
Kenya parliament sets clear oversight for digital assets
Kenya parliament advanced the bill after the national assembly’s finance committee, chaired by Kuria Kimani, completed hearings and redrafting that addressed market risks and supervision gaps. The text designates the Central Bank of Kenya as the licensing authority for the issuance of stablecoins and other virtual assets, while the Capital Markets Authority will oversee crypto exchanges and trading platforms. This split maps cleanly onto the instruments in question: money-like tokens sit with the central bank, and market venues sit with the markets regulator. The design reduces overlap, speeds authorization, and gives firms a clear front door. The bill positions Kenya to join South Africa among the few African markets with comprehensive digital-asset statutes. Lawmakers say they drew from established practices in the United States and the United Kingdom, focusing on licensing, fit-and-proper checks, disclosures, client-asset segregation, and clear event-reporting rules. The move follows several years in which regulators and industry debated how to balance user protection and open access. With parliament’s vote completed last week, attention turns to presidential assent and the short implementation window that follows.
Stablecoin licensing and exchange rules under the new act
The act gives the central bank a direct mandate over stablecoin issuance, reserve standards, and disclosures. That choice reflects a broader policy concern: U.S. dollar-backed stablecoins keep growing, and officials worry they could undermine less developed currencies if consumers and merchants migrate to private tokens. Under the bill, licensed issuers will document reserve composition, custody, and audit frequency, and will keep assets in high-quality instruments. Redemption should remain prompt and transparent to maintain par value and public confidence. Exchanges and trading platforms will fall under the Capital Markets Authority, which will license operators, require compliance officers, and enforce market-abuse controls. The regime covers onboarding, transaction monitoring, and suspicious-activity reporting to reduce misuse by criminals. It also sets out record-keeping and capital thresholds appropriate for firms that custody client assets. Kenya parliament expects these measures to raise standards without choking off access, since firms already perform many of these tasks to meet banking partner requirements.
Kenya parliament aims to draw fintech investment and jobs
Backers of the bill say legal certainty should attract exchanges, wallets, and service providers to set up in Nairobi and other hubs. Kuria Kimani cited past conversations with platforms such as Binance and Coinbase about local operations once clear rules exist. If licensing opens on a predictable timeline, firms can staff compliance, engineering, and customer-support roles while partnering with local banks and payment providers. The expectation is that investment follows clarity, and clarity now looks close if the president signs promptly. Kenya parliament also links the reform to the demographic profile of digital-asset use. Most users are between 18 and 35, and many already trade, settle payments, or invest with virtual assets. A home-grown framework could reduce reliance on offshore platforms and keep more activity within the domestic oversight perimeter. That should lift consumer protection, tax transparency, and data-security outcomes while keeping the door open for responsible growth in wallets, remittances, and merchant acceptance.
M-Pesa context, global models, and next steps for enforcement
The reform lands in a market shaped by M-Pesa, the mobile-money system operated by Safaricom that serves tens of millions of users with transfers, savings, and investment products. Kenya’s experience with handset-based finance gives regulators a strong base to evaluate wallet design, fraud risks, and user education. The bill does not alter M-Pesa, but it signals how digital assets might connect to existing rails through compliant issuers and licensed venues. If implemented well, new products could complement the mobile-money ecosystem without introducing avoidable instability. Sponsors say the law borrows from the United States and Britain, which stress licensing, audits, and market-abuse surveillance. Kenya’s regulators will still need to draft detailed rules, build supervisory teams, and publish application checklists. Transitional provisions should allow currently active firms to apply within a defined window while continuing basic operations. Clear timelines, public registers of licensees, and consistent enforcement will determine whether the framework delivers the promised mix of safety and access. Kenya parliament will likely continue oversight through committee hearings as rules roll out.
Conclusion
The Virtual Asset Service Providers Bill passed last week and now awaits the president’s signature, with the central bank to license stablecoin issuers and the markets regulator to license exchanges and platforms. By adopting tested elements from U.S. and U.K. practice and by responding to use among 18- to 35-year-olds, the framework targets real needs rather than headline promises. If the rollout stays clear and firm, Kenya parliament will have supplied investors, firms, and users with a workable rulebook that fits local conditions while aligning with global standards.
Disclaimer
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