Kenya’s National Treasury dropped the draft Virtual Asset Service Providers Regulations, 2026 this week, laying out the country’s most detailed blueprint for governing crypto businesses. Stablecoin issuers carry the steepest burden, facing minimum paid-up capital of Sh500 million, with liquid capital pegged at Sh100 million or 100% of current liabilities, whichever is higher. That number is not an estimate. It is in the draft.
The regulations were issued under the Virtual Asset Service Providers Act, 2025, with the stated goal of providing a legal framework for licensing and regulating virtual asset service providers operating in and from Kenya. Cabinet Secretary John Mbadi signed off on the public participation notice, with all submissions due by April 10.
Dual Regulators, Split Jurisdiction
The Central Bank of Kenya takes charge of payment-related crypto firms, stablecoin dealers, and conversion rails. The Capital Markets Authority supervises exchanges, brokers, and tokenization platforms under a dual-regulator model. Each body gets its own licensing lane. No crossover.
The draft stems from a multi-agency task force developed alongside the CBK and CMA, following Kenya’s February 2024 grey-listing by the Financial Action Task Force, which flagged gaps in the country’s anti-money laundering and counter-terrorism financing controls. The grey-listing pushed the timeline. Kenya could not afford a slow rollout.
For stablecoin issuers, the Regulatory Impact Statement proposes that at least 30% of customer funds sit in segregated accounts at Kenyan commercial banks. Remaining reserves must be placed in secure, low-risk assets including cash, central bank deposits, and government securities with residual maturity of 90 days or less. Repurchase agreements are capped at seven days.
Fees, Foreign Firms, and Background Checks
Token issuance platforms face a 0.05% transaction fee payable by each counterparty. Initial virtual asset offerings carry a proposed 0.5% levy on the value of a successful offer. Both figures sit inside the accompanying Regulatory Impact Statement published alongside the draft.
Foreign companies cannot obtain a full license directly. They must first secure a compliance certificate. All providers must maintain a physical office in Kenya, and directors and senior officers face background and competence assessments by regulators. Local companies are the only ones eligible for direct licensing.
As tweeted on X by Nyakundi Report (@NyakundiReport) on March 17:
“The National Treasury has released draft Virtual Asset Service Providers (VASP) Regulations 2026, introducing strict rules to govern Kenya’s fast-growing cryptocurrency sector. The regulations set licensing requirements for local and foreign crypto firms, mandate physical…”
Kenya ranks fifth globally in transactional crypto use, trailing only Ukraine, the US, Nigeria, and Vietnam, according to the 2025 World Crypto Ranking report by Bybit. Stablecoins drive merchant payments, remittances, and cross-border settlements here. The capital requirements target exactly those flows.
Industry Pushback and Forum Schedule
In December 2025, more than 50 crypto firms formed the Virtual Asset Association of Kenya (VAAK) to engage the CBK and CMA on proposed rules. VAAK later partnered with Africa Digital Assets, a policy research firm, to coordinate industry engagement. The association has flagged that the rules are not yet final.
During parliamentary debate over the VASP Bill, concerns arose that the Virtual Asset Chamber of Commerce, given a role in selecting regulatory board members, may have ties to Binance. VAC denied the allegations, stating it earned its seat through years of engagement with the IMF and Kenyan government officials.
Public forums run from March 30 to April 10 across 11 venues, including Mombasa, Kisii, Kisumu, Makueni, Kirinyaga, Kakamega, Garissa, Kitale, Meru, Nakuru, and Nairobi. Written submissions go to pstnt@treasury.go.ke, copied to vasps@treasury.go.ke. All virtual asset service providers must also open and operate a bank account in Kenya, with system audits required every two years by a certified IT auditor covering data security, transaction integrity, and cybersecurity preparedness.
