Kenya Inches Closer to Crypto Regulations, MPs Back Government Supervision Plan

Kenya’s MPs are reportedly backing the government’s Committee plan, which recommends a joint regulatory team to oversee crypto operations.

Per local reports, the National Assembly’s Finance Committee, approved by the full House, proposed five government agencies to jointly supervise virtual asset service providers (VASPs), in a move to regulate the industry.

The multi-agency group framework proposed by the government includes the Central Bank of Kenya, Capital Markets Authority, Competition Authority of Kenya, Communications Authority of Kenya, and the Office of the Data Protection Commissioner.

A social enterprise organisation, Credence Africa, proposed the plan, which the Committee endorsed to create a cross-sectoral regulatory unit.

Besides overseeing VASPs’ operations, the proposal will cover market conduct, data and protection, and digital communications infrastructure.

“The committee agreed with the proposal by the stakeholder (Credence Africa),” the Finance Committee report said. It has opened doors for public comments on the proposal.

The joint unit could also include any other institution designated by the Cabinet Secretary through a gazette notice.

Committee Adopts Virtual Assets Chamber’s Recommendation

The Virtual Assets Chamber (VAC), Kenya’s leading policy think tank for blockchain and virtual assets, has recommended deleting a clause in the legislation – Virtual Asset Service Providers Bill, 2025.

The VAC said that the provision, which grants the regulatory authority to conduct off-site surveillance, was “overly prescriptive.” It has no clear definition or boundaries on what off-site surveillance involves, it added.

The Financial Commission noted that it abides by the VAC’s recommendation.

The Bill has received strong backing from crypto players after it was introduced to Parliament on April 4, 2025.

From Challenges to Transformation

In Kenya, the VASPs have been facing challenges for several years in accessing banking services. The Central Bank issued an advisory that cautioned financial institutions against dealing with crypto-related businesses.

However, the Kenyan virtual asset landscape is on the cusp of a significant transformation with the introduction of the Bill. The proposal will require all crypto providers to open and maintain a bank account within Kenya, addressing transparency and accountability.

The Bill, if passed, would make Kenya the third among African nations, after Nigeria and South Africa, to have a crypto-specific law.