Kenya's VASP framework

Kenya now licenses virtual asset service providers. It has not banned crypto. The VASP Act No. 20 of 2025 commenced 4 November 2025, and Legal Notice No. 134 of 2026 brought the regulations into force on 22 July 2026. Supervision is split: the Central Bank covers payment-facing activity, custodial wallets, payment processors and fiat-referenced stablecoin issuance, while the Capital Markets Authority covers exchanges, brokers, offerings, tokenisation and investment advice. Mixed models answer to both.

The parts that affect a player

Extraterritorial reach. Any business targeting Kenyan consumers or deriving economic benefit from Kenya must comply, whether or not it has an office, staff or an entity here.
No transition relief. Section 47 sets a one-year window from commencement, expiring 4 November 2026. No sandbox, no grandfathering.
Capital thresholds are high. Reported minimums run from 10 million shillings for a payment processor or broker up to 300 million for a stablecoin issuer, which will thin the provider field.
Determination in 30 days. The regulations require a decision within 30 days of a complete application.

What we will not tell you is which providers are licensed. Reporting on this is contradictory, including on the same firm in the same month. There was also reporting at gazettement that no provider had yet been licensed and that anyone claiming authorisation was operating illegally, but we only found that through a news aggregator rather than a primary regulator notice. Check the CBK and CMA registers yourself before funding an account.

Tax interaction

The Finance Act 2025 repealed the 3% Digital Asset Tax and replaced it with a 10% excise duty on fees charged by virtual asset providers. The Finance Act 2026 clarified that wording to align with the VASP Act, required providers to file annual information returns with KRA, made failure or falsification an offence including for a nil return, and introduced a framework for automatic international exchange of virtual-asset transaction information.

Tax on crypto winnings P2P mechanics Gambling regulator

Is holding USDT legal in Kenya

The framework licenses service providers. It is not a prohibition on individuals holding virtual assets. For your own circumstances take advice rather than reading a general summary as permission.

Will my P2P platform still work after November 2026

That depends on whether it is authorised by then, and we are not going to predict which providers clear the bar. Watch the registers and avoid leaving large balances anywhere as the deadline approaches.

Does this framework cover gambling

No. Gambling is regulated under the Gambling Control Act 2025 and the GRA. These are separate regimes that happen to overlap at reg. 86, which restricts licensees from using virtual assets.