The Virtual Asset Service Providers Act, 2025 and the Regulations, 2026 — an introduction
Published 10 August 2026 · Article 1· The Virtual Asset Regulation Breakdown Series
For more than a decade, virtual assets moved through Kenya without a law to govern them. Exchanges operated, wallets held customer coins, and Kenyans bought and sold digital assets in volume. Regulators issued cautionary notices. Banks were told to keep their distance. But no statute said who could offer these services, on what terms, or to whom a customer could complain.
That is no longer the position.
The Virtual Asset Service Providers Act, No. 20 of 2025 commenced on 4 November 2025. It creates the licensing requirement, designates the Capital Markets Authority and the Central Bank of Kenya as regulators, imposes general obligations on licensees, and creates criminal offences carrying fines of up to KSh 25 million.
The Act was, deliberately, incomplete. Section 49 left eighteen matters to be prescribed by regulations — the application form, the fees, the capital thresholds, prudential standards, stablecoin requirements. Until those existed, the Act could not be operated.
The Virtual Asset Service Providers Regulations, 2026 supplied that content on 22 July 2026. They run to 151 regulations across fifteen Parts, with six Schedules.
Our opening article sets out what both instruments contain: the timeline from assent to the transitional deadline, how supervision is divided between the two regulators, the ten licensable activities and who supervises each, who may apply for a licence, what falls outside the framework, the capital thresholds, the enforcement ladder, and the compliance deadline of 4 November 2026.
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Published by T.M.M & Partners Advocates. This article is general information and not legal advice.