Kenya sets groundwork to regulate virtual assets amid rising adoption

The proposed law, developed by the National Treasury, Capital Markets Authority (CMA), and the Central Bank of Kenya (CBK), aims to offer legal clarity and consumer protection in a sector growing rapidly both locally and globally.

At a recent training session in Nairobi hosted by the Virtual Asset Chamber (VAC), members of Parliament’s Finance and National Planning Committee received technical and hands-on training on the virtual asset ecosystem. Supported by global exchange Binance, the session covered blockchain transactions, digital currencies, and regulatory challenges.

“This is a new frontier. Kenya is already third in Africa in virtual asset adoption. We must protect consumers and investors with proper legislation” said Julius Ruto, a committee member.

During the session, lawmakers conducted live transactions on Binance to gain practical insight into how virtual assets work, part of a broader effort to bridge the knowledge gap ahead of the bill’s debate.

“With the global virtual asset industry valued at over $2 trillion, this legislation is our opportunity to make Kenya a regional innovation hub,” said Tony Olendo, VAC Chairperson.

Allan Kakai, VAC Director, noted that key concerns were addressed.

“We discussed consumer protection, financial crime, and monetary policy. The session offered critical strategies to safeguard users and support responsible growth.”

Over 20 firms are operating in Kenya’s virtual asset space, but in a regulatory grey area. Legislators like David Mboni, MP, Kitui Rural, argue that clear laws are overdue.

“Without regulation, people risk losing money with no legal recourse. This bill gives needed structure, just like the stock exchange,” Mboni said.

The draft bill already reflects many of VAC’s earlier recommendations presented at a Naivasha stakeholder forum. It now enters a two-week public participation phase, where citizens are encouraged to submit views or attend forums.

As Kenya joins countries like Nigeria and South Africa in formalizing digital finance laws, the Bill could unlock financial inclusion, streamline cross-border payments, and support digital entrepreneurship.

Virtual assets include cryptocurrencies like Bitcoin and Ethereum, tokenized securities, and blockchain-based currencies. Though intangible, they hold real economic value and are widely used for investment, trade, and remittances.