Crypto-funded debit card in Kenya

Kenya's Virtual Asset Service Providers Act, 2025 is Act No. 20 of 2025; it received presidential assent on 15 October 2025, was published in Kenya Gazette Supplement No. 173 (Acts No. 20) on 21 October 2025 and commenced on 4 November 2025, and its implementing regulations were gazetted as Legal Notice No. 134 of 2026 on 22 July 2026.

The Virtual Asset Service Providers Regulations, 2026 stopped being a draft on 22 July 2026, when they were gazetted as Legal Notice No. 134 of 2026 in Kenya Gazette Supplement No. 185; they run to 151 regulations in fifteen parts and six schedules and impose licensing, capital, AML/CFT/CPF, cybersecurity, custody, market-conduct and stablecoin reserve duties that are now in force.

The Central Bank of Kenya licenses virtual asset wallet providers, virtual asset payment processors and stablecoin issuance under the First Schedule to the Virtual Asset Service Providers Act, 2025, and section 4A(1)(dc) of the Central Bank of Kenya Act now empowers it to license and supervise virtual asset service providers; virtual asset exchanges are licensed by the Capital Markets Authority and fall outside the Central Bank's perimeter.

The Capital Markets Authority licenses and supervises virtual asset exchanges, virtual asset brokers, virtual asset investment advisers, virtual asset managers, virtual asset offering providers conducting initial coin offerings, tokenisation providers and token issuance platforms under the First Schedule to the Virtual Asset Service Providers Act, 2025, and section 11(3)(fb) of the Capital Markets Act now requires it to regulate virtual asset service providers.

Kenya's financial intelligence unit is the Financial Reporting Centre, established under the Proceeds of Crime and Anti-Money Laundering Act, which receives and analyses suspicious transaction reports; AML/CFT/CPF supervision and enforcement for virtual asset service providers is carried out by the Central Bank of Kenya and the Capital Markets Authority under section 32 of the Virtual Asset Service Providers Act, 2025.

Virtual asset service providers licensed in Kenya must perform customer due diligence before onboarding a client under regulation 32 of the Virtual Asset Service Providers Regulations, 2026, carried out in accordance with the Proceeds of Crime and Anti-Money Laundering Act, and the Second Schedule to the Virtual Asset Service Providers Act, 2025 makes every virtual asset service provider a reporting institution under that Act.

The Second Schedule to Kenya's Virtual Asset Service Providers Act, 2025 amends the Proceeds of Crime and Anti-Money Laundering Act so that the definition of reporting institution expressly includes a virtual asset service provider, which places Kenyan virtual asset service providers under the suspicious transaction reporting duty owed to the Financial Reporting Centre with effect from the Act's commencement on 4 November 2025.

Kenyan virtual asset service providers must keep a record of both client and own transactions for not less than seven years from the date of the transaction under section 44(2) of the Virtual Asset Service Providers Act, 2025, repeated at regulations 22(1)(b) and 26(3) of Legal Notice No. 134 of 2026, and must give the regulator online read-only real-time access to those records under section 44(1).

The KES 500 million minimum paid-up capital for stablecoin issuers appeared only in the March 2026 draft Virtual Asset Service Providers Regulations; the figure carried into Legal Notice No. 134 of 2026 on 22 July 2026 is KES 300 million, set in the Fifth Schedule under Part IX of those Regulations.

The gazetted Virtual Asset Service Providers Regulations, 2026 require a stablecoin issuer to hold minimum liquid capital of KES 60 million or 100 per cent of current liabilities for at least thirty days, whichever is higher; the KES 100 million figure belongs to the superseded March 2026 draft.

A person issuing stablecoin in or from Kenya must be licensed by the Central Bank of Kenya, which the First Schedule to the Virtual Asset Service Providers Act, 2025 makes the regulatory authority for stablecoin issuance; regulation 4 of Legal Notice No. 134 of 2026 applies the Regulations to any person who actively solicits or targets Kenyan consumers, and regulation 70 forbids offering a stablecoin to the public without a licence, issuer status and Central Bank approval of the published white paper.

Ongoing monitoring requires regular reports, audits, and compliance standards.

Entity targeted: Bitpesa (operating through Lipsha Consortium Limited). Violation type: Operating money remittance business via Bitcoin without CBK authorization; AML/KYC non-compliance due to cryptocurrency anonymity. Penalty amount: None specified (service termination, not direct fine).

The Office of the Data Protection Commissioner issued suo motu determination ODPC/COMP/1394/2023 on 6 September 2023 against Worldcoin Foundation, Tools for Humanity and Tools for Humanity GmbH over biometric iris data collected in Kenya; the general penalty in section 73 of the Data Protection Act, No. 24 of 2019 is a fine not exceeding three million shillings or imprisonment not exceeding ten years or both, while the Data Commissioner's administrative penalty notice under sections 62 and 63 is capped at five million shillings or one per cent of an undertaking's preceding annual turnover, whichever is lower.

Directorate of Criminal Investigations (DCI) Crypto Fraud Unit: Handled over 500 crypto-related cases in past three years; dozens of arrests in 2024. High-profile busts in Nairobi and Nakuru targeted scams worth $119,000, $100,000, and $30,000 (no named entities or penalties detailed). Losses totaled $43.3 million in 2024 scams.