The National Treasury has published draft Virtual Asset Service Providers (VASP) Regulations 2026, setting out a formal licensing and oversight structure for Kenya crypto regulation. The notice, released Tuesday March 17, targets exchanges, wallet providers, and other intermediaries operating in the country’s digital asset space.
Kenya holds an estimated USD 1.2 trillion in virtual assets. The sector has grown on the back of high mobile money penetration and a young, tech-oriented population, yet it has run largely without formal oversight until now.
Licensing Conditions and Who Qualifies
Under the draft, only locally incorporated companies qualify directly for a license. Foreign firms must first obtain a compliance certificate before any licensing consideration. All providers are required to maintain a physical office in Kenya, and directors plus senior officers must pass background and competence checks by regulators.
The regulations draw from the Virtual Asset Service Providers Act, 2025 (Act No. 20 of 2025). The draft regulations state the framework’s goal is to provide a legal structure for licensing and regulating VASP activities in and from Kenya.
Stablecoin issuers face specific reserve requirements. At least 30 per cent of customer funds must sit in segregated accounts held within Kenyan commercial banks. The remaining portion must be placed in secure, low-risk assets that qualify as high-quality liquid assets, with limited exposure to market, credit, and concentration risks.
New Fees and High-Risk Bans
Issuers are restricted to holding reserves in cash, central bank deposits, short-term government securities maturing within 90 days, or repurchase agreements maturing within 7 days.
A 0.05% transaction fee applies to token issuance platforms, charged to each party in a trade. Entities seeking approval for virtual asset offerings must pay a fee equal to 0.5 per cent of a successful offering’s value.
The draft also bans transactions designed to conceal the identities of participants. Consumer protection and anti-money laundering compliance sit at the centre of the proposed framework, according to the ministry.
Public Consultations Running Through April
Forums are scheduled across Nairobi, Mombasa, Kisumu, and Eldoret. The Treasury has invited public submissions from stakeholders, with consultations expected to run through April before the ministry reviews feedback and moves toward finalising the regulations.
If adopted, the rules are expected to reshape operations for crypto businesses dealing in stablecoins and tokenised assets, while positioning Kenya in line with global digital finance standards.
