Kenya enacts VASP Act, formalizes crypto regulation with 12-month moratorium
Kenya’s President has signed the Virtual Asset Service Providers (VASP) Act into law, establishing a formal crypto regulation framework. The Act mandates licensing for stablecoins, exchanges, payment processors and wallet services. Only Kenyan-incorporated firms or those with local compliance certificates can apply.
The law designates the Central Bank of Kenya and the Capital Markets Authority as regulators. It also grants a 12-month moratorium for existing providers to comply. The VASP Act introduces consumer protection rules and aims to boost fintech investment. With Kenya leading peer-to-peer crypto trading and stablecoin transactions hitting $3.3 billion by June 2024, regulators expect the new crypto regulation to attract global players and curb scams through greater transparency.
Bullish
The enactment of the VASP Act provides clear crypto regulation, licensing and consumer protection measures that reduce legal uncertainty. In the short term, traders and investors may respond positively, boosting trading volumes on Kenyan platforms. In the long term, the framework’s emphasis on stablecoin licensing and regulator oversight by the Central Bank of Kenya and the Capital Markets Authority should attract institutional players, foster fintech partnerships and enhance market transparency—factors that support sustained growth in digital asset adoption.