- Kenya’s new bill establishes a regulatory framework for cryptocurrencies and digital assets.
- The Central Bank of Kenya and the Capital Markets Authority will oversee asset issuance and trading platforms.
- The legislation aims to boost Kenya’s financial technology sector and position it as a hub for digital finance in Africa.
Kenya is set to become one of the few African nations with formal regulations for digital assets after lawmakers approved the Virtual Asset Service Providers Bill. According to the available data concerning the bill that was passed last week by the National Assembly, it aims to provide a clear field for digital assets and other digital assets in the country. Kuria Kimani, the chairperson of the Finance Committee in parliament, said the bill aspires to establish order in a growing sector that has operated without apparent oversight.
Framework for Oversight and Licensing
The bill places the Central Bank of Kenya in charge of licensing and overseeing the issuance of stablecoins and other virtual assets. Meanwhile, the Capital Markets Authority will be responsible for regulating digital asset exchanges and related trading platforms. This dual structure is designed to separate the regulation of asset creation from trading and market operations.
The government’s approach mirrors established regulatory practices from countries such as the United States and the United Kingdom , Kimani noted. Kenya’s decision to introduce comprehensive digital asset laws addresses long-standing concerns about the absence of regulation in the industry.
The new framework is expected to attract both local and international investors, offering clarity for businesses operating in the sector. According to Kimani, several global exchanges, including Binance and Coinbase, have previously engaged with Kenyan authorities on potential partnerships pending the introduction of clear rules.
Anticipated Impact on the Financial Technology Sector
The government anticipates that the law will promote expansion in the financial technology sector in Kenya. The legal clarity, according to officials, may establish the nation as Africa’s primary hub for digital finance. Many Kenyans aged between 18 and 35 already use virtual assets for trading, payments, and investment purposes. Lawmakers think that the industry has the potential to be a significant force behind innovation and job creation if it is properly regulated.
Kenya’s action coincides with increased global interest in stablecoins , especially those based on the US dollar. The extensive use of these assets may have an impact on weaker national currencies, according to warnings from international financial regulators. Despite these reservations, Kenya hopes that the new framework will strike a balance between financial stability and innovation.
Kenya’s experience with digital finance through M-Pesa has shaped its approach to virtual assets. The mobile money platform, operated by Safaricom, has provided financial services to millions, including money transfers, savings, and investments. Lawmakers view the new legislation as the next step in strengthening Kenya’s role in Africa’s evolving financial landscape.
