Kenya’s parliament has passed a new bill to regulate digital assets, including cryptocurrencies, according to a senior lawmaker. The legislation aims to boost investment by establishing clear rules for licensing and operating within the emerging digital asset industry. The Virtual Asset Service Providers Bill was enacted last week, as announced by Kuria Kimani, the chairman of the finance committee in the National Assembly.
The bill addresses concerns over the lack of regulations governing the digital assets sector. This moves positions Kenya to join countries like South Africa as one of the few African nations with laws governing the digital assets industry. President William Ruto now needs to sign the bill into law.
The act designates the central bank as the licensing authority for the issuance of stablecoins and other virtual assets. Additionally, the capital markets regulator will oversee the licensing of those wishing to operate crypto exchanges and trading platforms. The government’s decision comes as countries prepare for a surge in U.S. dollar-backed stablecoins, which global regulators warn could undermine the currencies of less developed economies.
Kimani noted that the expected legal clarity is likely to attract more investments into the financial technology sector, including from major crypto exchanges like Binance and Coinbase. He mentioned past discussions between these platforms and the government. “We hope that Kenya can become the gateway into Africa,” he said. “Many young people aged 18 to 35 are now using virtual assets for trading, settling payments, and as a means of investment or conducting business.”
Although the digital assets industry has grown exponentially worldwide over the last decade, regulation remains a significant concern as governments aim to prevent criminals from exploiting the anonymity of these systems. The Kenyan law has drawn from established practices in other countries, such as the United States and Britain.
Kenya is recognized for its pioneering mobile-phone-based financial services, particularly through M-Pesa, operated by telecom company Safaricom. This platform provides money transfer, savings, and investment services to millions of people.
