Kenya Enacts Crypto Regulation Bill to Become Africa Gateway

The Kenyan Parliament’s enactment of the Virtual Asset Services Providers Bill 2025 marks a watershed moment for the country’s digital asset landscape. The legislation clearly delineates regulatory responsibilities between two key institutions: the Central Bank of Kenya and the Capital Markets Authority. According to the bill’s provisions, the Central Bank will have exclusive oversight of payment processors that facilitate conversions between fiat currencies and virtual assets, while the Capital Markets Authority will regulate brokers, investment advisors, and digital asset managers. This division of labor creates a comprehensive regulatory structure that addresses different aspects of the crypto ecosystem.

Finance committee chairman Kuria Kimani expressed optimism about the bill’s potential, telling Reuters that “We are hoping that Kenya can be now the gateway into Africa.” This sentiment reflects the government’s recognition of cryptocurrency’s growing importance, particularly among younger Kenyans. Kimani noted that “Most of the young people between 18 and 35 years of age are now using virtual assets for trading, settling payments, and as a way of investment or doing business.” The bill now awaits President William Ruto’s signature to become law, creating the legislative framework that will regulate crypto service providers and address potential misuse in the industry.

Kenya’s move toward formal regulation builds upon an already robust foundation of crypto adoption. According to Chainalysis’ geographic crypto adoption report, Sub-Saharan Africa ranked third globally, with Kenya specifically ranking fourth among African nations in total value received. The country saw nearly $20 billion in crypto assets received during the period from July 2024 to June 2025, demonstrating significant market activity despite the absence of formal regulation. This strong retail activity has been a driving force behind the region’s high adoption ranking.

The country’s familiarity with digital money provides a natural foundation for crypto adoption. An astonishing 96% of Kenyan households have used the mobile money app M-PESA, creating a population already comfortable with digital financial transactions. This existing infrastructure could facilitate smoother integration of regulated crypto services. However, the path hasn’t been entirely smooth—privacy concerns led to a Kenyan court order clamping down on Sam Altman’s Worldcoin operations earlier this year, highlighting the need for balanced regulation that protects consumers while fostering innovation.

Earlier protests in Kenya over financial distrust further underscored the appeal of alternative financial systems. Protesters pointed to cryptocurrency as a potential outlet for younger generations seeking to escape what they perceived as an unfair traditional system. This grassroots momentum, combined with the government’s regulatory push, creates a unique environment for Kenya’s crypto future.

Despite Kenya’s strong adoption metrics, the country has lagged behind regional neighbors in establishing clear regulatory frameworks. Coin Bureau analyst and co-founder Nic Puckrin noted that “Other countries in the region—notably South Africa—already have clear crypto licensing regimes, so Kenya is playing catch-up here.” South Africa began issuing crypto licenses in 2023, having classified crypto assets as financial products the year before, putting Kenya approximately two years behind its regional competitor.

Puckrin emphasized the urgency of Kenya’s situation, stating that “That means it will have to move quickly if it wants to become the ‘gateway into Africa.'” The competition for regional crypto dominance is intensifying, with South Africa’s head start giving it established regulatory processes and greater certainty for businesses operating in the digital asset space. Kenya’s challenge will be to implement its regulatory framework efficiently while maintaining the flexibility to adapt to this rapidly evolving industry.

The enactment of the Virtual Asset Services Providers Bill represents Kenya’s commitment to closing this regulatory gap. By establishing clear guidelines for service providers including those dealing with major cryptocurrencies like BTC and ETH, Kenya aims to create an environment that attracts legitimate businesses while protecting consumers. The success of this initiative will depend on effective implementation and the ability to balance innovation with necessary safeguards.