Kenya gazetted the Virtual Asset Service Providers Regulations, 2026, as Legal Notice No. 134 in Kenya Gazette Supplement No. 185, completing the VASP Act that President William Ruto signed in October 2025. The 116-page rulebook prohibits stablecoin issuers from paying interest and requires existing operators to obtain licenses by 4 November 2026. The regulations take effect in a market that recorded approximately $19 billion in crypto inflows between July 2024 and June 2025, according to Chainalysis data. The framework establishes dual regulatory oversight, with the Central Bank of Kenya (CBK) supervising fiat conversion and stablecoins while the Capital Markets Authority (CMA) regulates exchanges and token issuance. Unlicensed operation carries fines up to KSh25 million (approximately $194,000) and possible imprisonment, yet no VASP licenses have been issued as of the gazetting.
CBK and CMA Split Regulatory Oversight Under Dual-Regulator Framework
The gazetted regulations divide supervision between Kenya's Central Bank (CBK) and Capital Markets Authority (CMA). The CBK supervises virtual-asset-to-fiat conversion services and stablecoin issuers, while the CMA regulates exchanges, token issuance platforms, initial coin offerings and tokenization activities. The framework applies extraterritorially to offshore platforms that target Kenyan consumers or derive economic benefit from the market, regardless of physical presence in the country. The rulebook creates dedicated regimes for stablecoins, tokenized real-world assets, ICOs, wallet providers, cybersecurity, advertising and market conduct.
Kenya Bans Stablecoin Interest Payments and Sets KSh300 Million Capital Floor
Legal Notice No. 134 prohibits stablecoin issuers from paying interest on stablecoins. Independent reviews by TechCabal and BitKE confirmed the interest ban, which sits alongside requirements for issuers to hold separate licenses, publish white papers, maintain reserves, guarantee redeemability and submit to audits. Stablecoin issuers must hold KSh300 million (approximately $2.3 million) in paid-up capital plus liquid capital of KSh60 million (approximately $465,000). This represents a reduction from the draft threshold of KSh500 million (approximately $3.9 million). Other license categories carry distinct capital requirements: token issuers and tokenization platforms require KSh200 million (approximately $1.55 million); exchanges and wallet providers require KSh150 million (approximately $1.16 million); payment processors require KSh50 million (approximately $388,000); brokers and managers require KSh30 million (approximately $233,000). Firms offering multiple services must meet each category's threshold separately.
Existing Operators Face 4 November 2026 Licensing Deadline With Zero Licenses Issued
Existing operators have until 4 November 2026 to secure licenses under the gazetted regulations. The VASP Act imposes fines up to KSh25 million (approximately $194,000) and possible imprisonment for unlicensed activity. Shortly before the regulations were gazetted, the CBK and CMA confirmed that no VASP has been licensed under the law and that any firm claiming authorization operates illegally. Firms operating in the market, including Luno, Busha, Kotani Pay and Binance, face the same deadline. The regulators began accepting applications only after the rules were gazetted. In March, when the draft rules were first proposed, the Virtual Asset Association of Kenya warned the capital demands would push startups offshore.
FAQ
What did Kenya's gazetted VASP regulations prohibit for stablecoin issuers?
Legal Notice No. 134 prohibits stablecoin issuers from paying interest on stablecoins. The provision was confirmed in independent reviews by TechCabal and BitKE. Issuers must also hold KSh300 million (approximately $2.3 million) in paid-up capital, maintain reserves, guarantee redeemability and submit to audits.
When must existing crypto operators in Kenya obtain VASP licenses?
Existing operators have until 4 November 2026 to obtain licenses under the gazetted Virtual Asset Service Providers Regulations, 2026. Operating without a license carries fines up to KSh25 million (approximately $194,000) and possible imprisonment under the VASP Act. As of the gazetting, no VASP licenses have been issued.
Which regulators supervise crypto activities under Kenya's VASP framework?
The Central Bank of Kenya (CBK) supervises virtual-asset-to-fiat conversion services and stablecoin issuers. The Capital Markets Authority (CMA) regulates exchanges, token issuance platforms, initial coin offerings and tokenization activities. The framework applies to both domestic operators and offshore platforms serving Kenyan consumers.
