Kenya’s National Assembly Supports Cryptocurrency Regulation
In a notable development, members of Kenya’s National Assembly have expressed their support for a government-driven initiative aimed at creating a comprehensive regulatory framework for cryptocurrency operations. This initiative was championed by the Finance Committee of the Assembly, which, following a thorough evaluation, has proposed the establishment of a collaborative oversight body made up of five key government agencies to monitor virtual asset service providers (VASPs).
Proposed Supervisory Entity
The proposed supervisory entity will include representatives from:
- Central Bank of Kenya
- Capital Markets Authority
- Competition Authority of Kenya
- Communications Authority of Kenya
- Office of the Data Protection Commissioner
This multi-agency task force aims to bolster regulatory measures within the rapidly evolving crypto market.
Framework Introduction and Public Engagement
The framework for this initiative was introduced by Credence Africa, a social enterprise organization, which has been at the forefront of advocating for an integrated approach to cryptocurrency regulation. This effort not only aims to ensure compliance among VASPs but also intends to oversee market practices, safeguard data, and enhance digital communications infrastructure, as outlined in the Committee’s report. Moreover, the proposal is currently open for public commentary, providing an opportunity for broader engagement on the regulatory process.
Virtual Assets Chamber’s Recommendations
In a related development, the Virtual Assets Chamber (VAC) of Kenya—an influential think tank focused on blockchain technology and virtual assets—has advised revisions to the draft legislation known as the Virtual Asset Service Providers Bill of 2025. Specifically, VAC is advocating for the removal of a particular provision that would permit regulators to conduct off-site surveillance of VASPs, arguing that it is too vague and lacks definitive guidelines about its execution. The Financial Commission is reported to be in alignment with this recommendation.
Legislative Impact on the Cryptocurrency Sector
Introduced to Parliament in early April 2025, the bill has gained significant backing from stakeholders in the cryptocurrency sector. The regulation seeks to address longstanding challenges faced by VASPs in accessing banking services, particularly in light of previous advisories from the Central Bank warning financial institutions to exercise caution when engaging with crypto businesses.
If successfully enacted, this legislation would require all crypto service providers to establish and maintain banking accounts in Kenya, which is expected to enhance accountability and transparency within the industry. This step could potentially position Kenya as the third African nation, following Nigeria and South Africa, to introduce specific legal frameworks governing cryptocurrency transactions.
