Members of the National Assembly commenced the Second Reading of the Virtual Asset Service Providers Bill (National Assembly Bill No.15 of 2025) on June 24th 2025.

The  Bill which seeks to  establish a comprehensive regulatory framework for the country's booming virtual asset sector. Spearheaded by Hon. Kuria Kimani (Molo), Chairperson of the Departmental Committee on Finance and National Planning, the Bill seeks to position Kenya as a leader in digital finance on the African continent.

Hon. Kimani, moving the Bill, highlighted Kenya's impressive engagement with digital assets. "Kenya is ranked third in Africa in on-chain weighted transactions volume," he stated, adding that "in the last one year, Kenya traded US$2 billion in decentralised protocols, liquidity aggression and synthetic platforms." He emphasized the sheer scale of adoption, noting, "We have approximately 6.1 million users."

 "We have potential in this space to generate at least US$1 billion in terms of foreign direct investment," Hon. Kimani asserted.

 Furthermore, he projected a substantial impact on job creation, stating, "The passage of this Bill has the potential to create, at least, 25,000 jobs in Kenya in the next one year." In a forward-looking vision, he even suggested that blockchain technology could address the country's substantial pending bills: "The Controller of Budget estimates that we have approximately Ksh550 billion worth of pending bills. I look forward to when this can be tokenised."

Hon. Kimani recalled a conversation with a former Central Bank of Kenya (CBK) Governor who dismissed virtual assets as a "passing cloud, a fad that would fade away." Today, he declared, "it is evident that these technologies are no longer a fad. Digital assets, including bitcoin, blockchain, Ethereum, stablecoins and others, are here to stay."

"The Virtual Asset Service Providers Bill is will bring order to the digital asset ecosystem," said Hon. Kimani Ichung'wa (Kikuyu)

According to Part II and Part III of the Bill, any individual or entity engaging in virtual asset services in or from Kenya will be required to obtain a license from a designated regulatory authority, which could include the Capital Markets Authority (CMA), the Central Bank of Kenya (CBK), or a newly proposed Virtual Assets Regulatory Authority.

Hon. Kimani underscored the importance of this licensing requirement by referencing past unregulated failures: "In 2023, thousands of Kenyans lost millions of shillings when the cryptocurrency platform Bitstream Circle collapsed. It had promised high returns and operated without any regulatory oversight." 

The Bill seeks to prevent such occurrences by mandating that virtual asset service providers (VASPs) "establish and maintain effective internal policies to identify, mitigate and manage potential or actual conflicts of interest" (Part III, Clause 24).

Seconding the Bill, the Leader of the Majority Party, Hon. Kimani Ichung’wah (Kikuyu), drew parallels between the current virtual asset revolution and Kenya's pioneering role in mobile money. "Even before America, the Silicon Valley, and India, and other countries moved into mobile money transfers, Kenya led the way. Therefore, we cannot afford to be left behind in the space of virtual asset," he stated.

However, Hon. Ichung’wah also cautioned against the risks inherent in an unregulated environment, citing concerns like "cyber security risks, data privacy risks, fraud, and scams." He specifically highlighted the prevalence of financial scams, noting, "Many of those people, including some who are in our space, are involved in what has been christened the wash wash. These people are now graduating from their wash wash business into the virtual assets industry, and scamming very many Kenyans."

To address these concerns, Part IV of the Bill mandates that VASPs "maintain adequate safeguards for client assets and obtain appropriate insurance cover." Furthermore, it stipulates that providers "maintain a bank account in Kenya to enable effective monitoring and oversight." Hon. Ichung’wah emphasized the consumer protection aspect: "It is not clear how to get your money back from a virtual asset trader if you need to. Before this policy was enacted, there was no framework."

Part V of the Bill also grants regulatory authorities powers to "vet shareholders and senior officers of virtual assets service providers," conduct "on-site and off-site inspections," and crucially, "enforce anti-money laundering and financing of terrorism laws." Hon. Ichung’wah stressed the importance of this, stating, "Like all other financial assets, this is one area that could largely be abused by those who finance terrorism or engage in money laundering."

Hon. Naisula Lesuuda (Samburu West) pointed out the need to protect young people, who are increasingly drawn to virtual assets. "You will rarely find a young person telling you they want to invest in a piece of land. They are not like the older generation who chase a piece of land or an apartment," she observed. She supported the Bill's requirement for a registered office within Kenya to ensure accountability, stating, "In case you con somebody, it will be possible for the regulatory bodies to track you down."

However, Hon. Lesuuda also raised concerns about potential barriers for small start-ups. "The licence and compliance costs are high. Young people who are keen on this will say they are being locked out of practice," she cautioned. "Small start-ups may struggle with the financial and bureaucratic burdens, leading to monopolisation by large firms." 

Hon. Lesuuda also pointed out the issue of data privacy, noting, "There is also the whole issue of collection of extensive customer data, which may violate user privacy rights." These are areas, she suggested, that might warrant further consideration during the Committee of the whole House.

Consideration of the Virtual Asset Service Providers Bill (National Assembly Bill No.15 of 2025) is expected to continue once the National Assembly resumes from recess.