Kenya’s Crypto Regulation Nears Reality as VASP Bill Advances
Kenya is on the cusp of establishing a formal regulatory framework for its burgeoning digital asset sector, following a significant legislative milestone. The Virtual Asset Service Providers (VASP) Bill recently secured approval from the National Assembly at the committee stage. This pivotal development means the draft legislation now proceeds to a third reading before ultimately being presented to President William Ruto for his signature, marking a definitive step towards codified crypto governance in the nation.
This legislation represents Kenya’s most assertive move yet to regulate digital assets, setting a precedent that could position the country as East Africa’s leading jurisdiction for crypto innovation and oversight. As one of Africa’s top five largest crypto markets, Kenya is clearly signaling its intent to draw substantial investment and foster technological advancements. Simultaneously, the bill aims to tighten oversight over a rapidly expanding market that has, until now, largely operated within ambiguous regulatory zones. The new framework designates the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA) as the primary regulatory bodies. Furthermore, it empowers the Treasury to formulate detailed subsidiary regulations. These future rules are expected to cover critical areas such as the issuance of stablecoins, the tokenization of real-world assets (RWAs), the operation of trading platforms, and capital requirements for VASPs.
The advancement of the VASP Bill underscores Kenya’s commitment to creating a secure and predictable environment for the digital economy. By clearly defining roles for key institutions like the CBK and CMA, and outlining the scope for future detailed regulations from the Treasury, Kenya is paving the way for responsible growth in the virtual asset space. This strategic move is anticipated to not only safeguard investors and consumers but also attract further innovation and foreign direct investment into the East African nation’s vibrant technology landscape.
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