Kenya has launched a public consultation on draft rules to regulate virtual asset businesses; This marks the clearest step yet to bring cryptocurrencies and other digital assets under official government oversight after years of operating in a legal gray area.
National Treasury said the proposed Virtual Asset Service Providers Regulations 2026 were developed by a multi-agency task force in consultation with the Central Bank of Kenya and the Capital Markets Authority and invited public and industry comments by April 10.
The draft rules are intended to operationalize Kenya’s Virtual Asset Service Providers Act 2025, which establishes the legal basis for the licensing and supervision of firms dealing in virtual assets “in or from Kenya”.
While the law states that its main purpose is to provide a framework for licensing and regulating virtual asset service providers, the draft regulations set out how this oversight will work in practice.
According to the proposals, companies offering virtual asset services will be required to obtain a license before starting operations, and applicants will be required to provide information about ownership, management, source of funds and business models.
The regulations also require minimum capital standards, risk management systems, anti-money laundering controls and “fit and proper” testing, while giving regulators the power to reject applications deemed to pose a risk to financial stability or consumer protection.
Licensed firms will face ongoing obligations after approval, including reporting, audits, inspections and recordkeeping requirements.
The bill requires providers to retain transaction records for at least seven years and places a strong emphasis on consumer protection measures, including disclosure of risks such as price fluctuations and cyber threats, complaint handling systems, protection of customer funds and transparent pricing of fees and commissions.
The rules will also restrict misleading advertising and require risk warnings in promotions.
The proposed framework goes beyond spot crypto trading and addresses a broader range of digital asset activities.
Initial coin offerings include provisions for stablecoins and tokenized real-world assets and require ICO issuers to publish detailed whitepapers and stablecoin issuers to maintain sufficient reserve assets and redeemability.
The draft also sets standards for virtual asset trading platforms on transparency, fair trading and prevention of market abuse.
Kenya’s move builds on a policy move that has gained momentum in the last two years. In October 2025, MPs passed the Virtual Asset Service Providers Bill, and officials said clear rules could attract investment and prevent criminal misuse of digital assets.
Reuters reported at the time that the law designated the central bank as the licensing authority for the issuance of stablecoins and other virtual assets, while the capital markets regulator would oversee exchanges and trading platforms.
The consultation suggests that Kenya is trying to strike a balance between innovation and risk control as the use of digital assets spreads in one of Africa’s most active fintech markets.
Authorities are also extending the rules to organizations that operate digitally but generate revenue from Kenya, signaling that offshore or online-only players will not be exempt from oversight.
Kenya is moving from broad policy intent to operational regulation and that is the important shift here.
The draft rules are not just a symbolic endorsement of crypto; They outline a full compliance architecture covering licensing, AML, disclosures, capital, advertising, stablecoins and ICOs.
