Kenya’s parliament has approved the Virtual Asset Service Providers Bill, a landmark step toward a formal regulatory framework for cryptocurrencies and other digital assets that industry officials say could unlock investment and job opportunities across the East African nation.
The bill, passed last week and announced by finance committee chair Kuria Kimani, now moves to President William Ruto for assent.
Under the new law, the Central Bank of Kenya would be designated the licensing authority for stablecoin issuers and other virtual asset products, while the Capital Markets Authority would oversee exchanges and trading platforms.
Lawmakers framed the legislation as a necessary response to rapid retail adoption among younger Kenyans and a bid to position Nairobi as a gateway for crypto investment into Africa. Kimani told Reuters that global trading firms have already held talks with Nairobi and that clear rules are needed to attract institutional capital.
Regulatory safeguards in the bill mirror international practice, borrowing elements from U.S. and U.K. frameworks to address anti-money-laundering risks, consumer protection, and operational standards for providers.
That approach is intended to balance innovation with oversight, but experts caution that practical implementation will require close coordination between regulators, banks, and market participants.
Critics warn that the surge of dollar-pegged stablecoins could present risks to smaller economies’ monetary sovereignty if not carefully managed, and Kenya will need robust reserve and custody rules to prevent systemic exposure.
Supporters counter that Kenya’s long experience with mobile finance, led by M-Pesa, gives it an advantage in building a regulated digital payment infrastructure and expanding financial inclusion.
If President Ruto signs the bill, Kenya would join a small group of African nations with explicit crypto laws, including South Africa, and could emerge as a regional hub for regulated digital finance.
Reuters coverage of the parliamentary decision underscored the government’s goal of attracting investors while tightening oversight.