The Virtual Asset Service Providers (VASP) Bill 2025, having cleared its final hurdle in the National Assembly, the third reading, now sits on President William Ruto’s desk, waiting for the signature that will make it law.
The bill is set to finally drag the world of crypto into the disciplined light of day, offering consumers much-needed protection and giving legitimate businesses the legal certainty they’ve been craving.
Once signed into law, every company dealing in digital assets will now have to find a home within the formal financial system, answering either to the steady hand of the Central Bank of Kenya (CBK) or the market-savvy Capital Markets Authority (CMA).
Where a firm ends up depends entirely on what it does—payment and virtual coin operations will likely fall under the CBK’s watchful eye, while anything resembling an investment product will be the CMA’s domain.
Companies will be required to dig deep into their policies on everything from money laundering and data privacy to how they safeguard customer assets, testing them against global standards.
Regulators have made it clear they’re not interested in paperwork for its own sake, they will be looking for proof of real, grown-up institutional maturity.
Despite having previously proposed the idea of a single, dedicated watchdog for digital assets, the Virtual Assets Regulatory Authority (VARA), the final version of the bill has scrapped the move.
Instead, the sector will have to find its voice through new alliances and sandbox forums led by the CBK and CMA. Under these forums, the licensing conditions and the technical guidelines will be hammered out.
Additionally, with Kenya Revenue Authority (KRA) now fully alert to the tax potential of virtual assets, companies will have to ensure transparency in their reporting frameworks.
The move follows a recent change which saw the 3% Digital Asset Tax being replaced with a 10% excise duty on platform fees, a clear move to tax the service, not the asset itself.
And even though compliance costs are set to soar in the short term, it is clear the digital asset industry, as a whole, is set to grow to new heights.
