Treasury Unveils Framework to License and Supervise Digital Asset Firms in Kenya
The framework is designed to promote a fair, transparent, and competitive digital asset market.
The National Treasury and Economic Planning of Kenya has announced plans to operationalize the Virtual Asset Service Providers Act, 2025, establishing a comprehensive legal and regulatory framework for licensing, supervising, and regulating virtual asset businesses operating in and from Kenya.
Virtual assets such as cryptocurrencies, tokenized assets, and stablecoins are increasingly reshaping global financial systems, and Kenya is positioning itself to embrace innovation while maintaining financial stability, protecting consumers, and mitigating emerging risks within the sector.
The framework is designed to promote a fair, transparent, and competitive digital asset market. It aims to strengthen investor confidence, support innovation, and unlock new economic opportunities through a structured and well-regulated environment for virtual asset service providers.
Key safeguards under the Act include fit-and-proper ownership requirements, adequate capital thresholds, strong governance structures, and robust risk management systems, including anti-money laundering and counter-financing of terrorism (AML/CFT) compliance measures.
Consumer protection is a central focus of the framework, with requirements for clear risk disclosures, transparent pricing, effective complaint resolution mechanisms, and strict segregation and protection of customer assets to prevent misuse or loss.
To ensure market integrity, the framework introduces fair trading rules, due diligence requirements before listing virtual assets, continuous market monitoring, and strict penalties for manipulation, insider trading, and false trading activities.
Additional oversight measures include continuous reporting, both onsite and offsite supervision, strengthened cybersecurity standards, mandatory audits, insurance requirements, and prudential controls aimed at improving resilience across the virtual asset ecosystem.
The government emphasized that implementation will follow a whole-of-government approach, involving coordinated efforts across relevant institutions to ensure effective enforcement and regulation of the emerging digital asset market.
