Kenya’s push to formally regulate virtual assets has crossed a key threshold. Public participation on the Draft Virtual Asset Service Providers Regulations, 2026 has officially concluded, with the National Treasury now moving to review and consolidate stakeholder submissions ahead of the final regulations.
The Kenya National Treasury on X confirmed the close of the consultation window, stating that the framework is designed to establish “a fair, transparent, and competitive market, supporting innovation, strengthening investor confidence, and unlocking new economic opportunities.” The regulations operationalize the Virtual Asset Service Providers Act, 2025, which President William Ruto signed into law in October 2025 and which came into force on November 4 that same year.
What the Draft Regulations Actually Require
The draft imposes a dual-regulator model. The Central Bank of Kenya will supervise wallet providers, stablecoin issuers, and payment processors. The Capital Markets Authority takes charge of exchanges, brokers, and tokenization platforms. Both agencies work under a whole-of-government structure that the Treasury has described as coordinated oversight.
Stablecoin issuers face a specific requirement: at least 30 percent of customer funds must be held in segregated accounts within Kenyan commercial banks. The remaining portion must stay in high-quality liquid assets with minimal credit and concentration risk exposure. Licensing applications across categories will carry capitalization thresholds, with figures in the full draft PDF putting the minimum for stablecoin issuers at KES 500 million.
The Virtual Asset Association of Kenya has already raised concerns that such thresholds could effectively shut smaller Kenyan-based operators out of the licensed market. That tension between protecting consumers and not pricing out local startups runs through most of the written submissions the Treasury now has to work through.
FATF Context and the Pressure Behind the Timeline
Kenya did not arrive at this framework by choice alone. The Financial Action Task Force grey-listed Kenya in February 2024, citing weaknesses in its anti-money laundering and counter-terrorism financing systems. One of FATF’s prescribed remedies was a formal legal structure for licensing and supervising virtual asset businesses.
That explains why the VASP Act moved fast through Parliament. It also explains the compliance-heavy tone of the draft regulations, which include requirements for AML/CFT systems, fit-and-proper ownership tests, continuous market monitoring, and zero tolerance provisions against manipulation and insider trading.
What Comes Next
The public notice page on the Treasury website now reflects the post-consultation phase. The Central Bank’s mirror of the notice outlines the same roadmap: review submissions, consolidate, finalize. There is no gazettal date confirmed yet.
“Kenya is positioning itself to harness innovation while safeguarding financial stability, protecting consumers, and managing emerging risks,” the Treasury wrote on X.
The Treasury node page tracking the process confirms that stakeholders are encouraged to continue monitoring updates as the finalization stage progresses.
Virtual assets covered under the framework include cryptocurrencies, tokenized assets, and stablecoins. The draft also broadens the definition of a virtual asset to cover digital representations of real-world assets on blockchain, whether cryptographically secured or not. That expansion is one of the more consequential technical details that came up across the public forums, which were held in Nairobi, Mombasa, Kisumu, and Eldoret.
Kenya’s framework now sits in the hands of treasury officials and two regulators. What comes out of the submissions review will determine whether the country becomes a viable licensing destination for regional crypto firms or another market where the compliance bar makes local entry impractical.
