Kenya proposes first crypto regulation bill to oversee stablecoins and ICOs

Kenya has introduced the Virtual Asset Service Providers Bill 2025, its first attempt to regulate the fast-growing cryptocurrency sector. The bill aims to create a legal framework for digital assets, including stablecoins, digital wallets, exchanges, and tokenisation platforms. It is part of the government's broader efforts to improve tax compliance and curb financial crimes such as money laundering and terrorism financing.

The proposed law establishes a dual regulatory system shared between the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA). The CBK would oversee wallet providers, stablecoin issuers, and crypto payment systems, while the CMA would license exchanges, brokers, and tokenisation platforms. ICOs would be brought under regulation, with firms required to seek CMA approval and follow disclosure rules similar to IPOs.

Tokenisation platforms would need to register with the CMA and explain how real-world assets are valued, stored, and traded. While the move could expand investment opportunities through fractional ownership, it also raises concerns about fraud and asset verification. If passed, the bill could make Kenya a regulatory leader in Africa’s crypto landscape.