Kenya has opened a public consultation on draft rules to regulate virtual asset businesses, marking the clearest step yet toward bringing cryptocurrencies and other digital assets under formal state oversight after years of operating in a legal grey area.
The 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 comments from the public and industry by April 10.
The draft rules are meant to operationalise Kenya’s Virtual Asset Service Providers Act, 2025, which created the legal basis for licensing and supervising firms dealing in virtual assets “in or from Kenya.”
The Act says its main objective is to provide a framework to license and regulate virtual asset service providers, while the draft regulations set out how that oversight would work in practice.
Under the proposals, firms offering virtual asset services would need to obtain licences before starting operations, with applicants required to disclose information on ownership, management, source of funds and business models.
The regulations also call for minimum capital standards, risk-management systems, anti-money laundering controls and “fit and proper” tests, while giving regulators authority to reject applicants seen as posing risks to financial stability or consumer protection.
Licensed firms would face continuing obligations after approval, including reporting, audits, inspections and record-keeping requirements.
The draft requires providers to retain transaction records for at least seven years and puts strong emphasis on consumer safeguards, including disclosure of risks such as price volatility and cyber threats, complaint-handling systems, protection of customer funds and transparent pricing of fees and commissions.
The rules would also restrict misleading advertising and require risk warnings in promotions.
The proposed framework goes beyond spot crypto trading and addresses a wider range of digital asset activities.
It includes provisions for initial coin offerings, stablecoins and tokenised real-world assets, requiring ICO issuers to publish detailed white papers and stablecoin issuers to maintain adequate reserve assets and redeemability.
The draft also sets standards for virtual asset trading platforms around transparency, fair trading and the prevention of market abuse.
Kenya’s move builds on a policy push that gained momentum over the past two years. In October 2025, lawmakers passed the Virtual Asset Service Providers Bill, with officials saying clear rules could attract investment while curbing criminal misuse of digital assets.
Reuters reported at the time that the law designated the central bank as licensing authority for issuance of stablecoins and other virtual assets, while the capital markets regulator would oversee exchanges and trading platforms.
The consultation suggests Kenya is trying to strike a balance between innovation and risk control as digital asset usage spreads in one of Africa’s most active fintech markets.
By extending the rules to entities operating digitally but deriving income from Kenya, authorities are also signalling that offshore or online-only players will not necessarily fall outside the scope of supervision.
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.