The BGA Kenya team, led by Managing Director Dickson Omondi, wrote an update to clients on the Kenyan government’s proposed regulatory framework for virtual assets.

Context

  • The Kenyan government has drafted the Virtual Assets Service Providers Bill 2025, which sets up a regulatory framework for digital assets. The proposed law provides for the establishment of sector regulatory authorities, licensing and operations of virtual assets service providers, regulating the issuance of initial virtual asset offerings. It also prescribes enforcement mechanisms.
  • The proposed framework highlights Kenya’s ambitions to be a leading financial innovation center. It is aimed at developing a competitive and stable market for digital assets.

Significance

  • The law sets licensing requirements for virtual asset service providers. Providers must maintain registered offices in Kenya, and a chief executive officer must be appointed to manage operations in the country. Other considerations include compliance issues; capital, solvency and insurance requirements; consumer and data protection requirements; cybersecurity measures under Kenyan law; record-keeping requirements; and measures to combat money laundering and terrorist financing.
  • The Capital Markets Authority and the Central Bank of Kenya are designated as the primary regulators of virtual assets. They are charged with licensing virtual asset service providers, approving and supervising issuance of initial virtual asset offering and ensuring compliance with the law.

Implications

  • The development of a regulatory framework offers virtual asset service providers with insight into how they can prepare for compliance with future regulations. Given the role of the CMA and CBK, companies that intend to trade virtual assets in Kenya will require strong relationships with both regulators to ensure compliance.
  • With the regulatory framework still in development, virtual asset service providers have the opportunity to influence the final contents of the law. Ultimately, the final version of the Virtual Assets Service Providers Bill 2025 will balance financial innovation with financial stability.

We will continue to keep you updated on developments in Kenya as they occur. If you have any questions or comments, please contact BGA Kenya Managing Director Dickson Omondi at domondi@bowergroupasia.com.

Best regards,

BGA Kenya Team