Kenya Curated

DeFi Intel Research Desk2026-07-14Africa

Is crypto legal in Kenya? (2026)

Yes — cryptocurrency is legal in Kenya. Current status: Legal — VASP Act 2025 in force; licensing not yet open. Oversight sits with Central Bank of Kenya (CBK) + Capital Markets Authority (CMA) — split mandate. Full details — governing law, licensing, tax and dated enforcement history — follow below (last reviewed 2026-07-14).

Framework: Virtual Asset Service Providers Act, 2025 (assented 15 October 2025; commenced 4 November 2025) + Draft Virtual Asset Service Providers Regulations, 2026 (published 17 March 2026, not yet gazetted).

Kenya has completed the pivot from a decade of de facto restriction to a statutory licensing regime. The restrictive era began in December 2015, when the Central Bank of Kenya issued a public notice cautioning that virtual currencies such as Bitcoin were not legal tender and carried fraud, volatility and loss-recovery risks, paired with Banking Circular No. 14 of 2015 warning banks against dealing in virtual currencies or servicing crypto businesses — a combination that cut exchanges off from bank rails and pushed one of Africa's most active retail markets into P2P channels for years.

The turn came in 2025. Parliament passed the Virtual Asset Service Providers Act, 2025; President Ruto assented on 15 October 2025 and the Act commenced on 4 November 2025, giving Kenya its first comprehensive crypto framework. The Act splits the market between two regulators: the CBK supervises virtual-asset issuance and stablecoins — reserve quality, redemption and payments-system safety — along with payment-side providers, while the CMA licenses and supervises exchanges, brokers and custodians and polices market conduct, disclosure and client-asset protection. Licensed VASPs face the full AML/CFT stack: KYC/CDD, ongoing monitoring, suspicious-transaction reporting, recordkeeping, Travel Rule compliance, governance, cybersecurity and audit obligations.

Enactment is not yet an operating market. In a joint public notice, the CBK and CMA confirmed that licensing begins only once implementing regulations are in place, and the National Treasury published the Draft Virtual Asset Service Providers Regulations, 2026 on 17 March 2026, with public comments open through 10 April 2026 ahead of gazettement. The draft sets stiff entry terms — most notably minimum paid-up capital of KES 500 million (≈US$3.86M) for stablecoin issuers — plus segregation of client funds from operational accounts. The Virtual Asset Association of Kenya, representing roughly 50 firms, has pushed back, arguing the capital thresholds could lock out local startups and drive users to unlicensed platforms. As of this review (14 July 2026), the final gazetted regulations and the first licences had not yet been published in the sources we track.

Tax treatment

Kenya has already run a full experiment cycle on crypto tax. The Finance Act 2023 introduced the Digital Asset Tax (DAT) — 3% of gross transaction value — effective September 2023. It was widely criticised as a tax on capital rather than income: traders paid 3% of the full transfer value regardless of profit or loss. The Finance Act 2025 repealed the DAT and replaced it, effective 1 July 2025, with a 10% excise duty on the fees and commissions charged by virtual asset service providers on virtual-asset transactions — aligning crypto platforms with how bank and payment-service fees are taxed. The excise is charged on the platform fee, not the transaction value, and is borne by customers of exchanges, custodians and brokers. Tax practitioners (including Deloitte Kenya) note remaining legislative gaps in how the excise interacts with the new VASP licensing regime; the income-tax treatment of individuals' trading gains after the DAT repeal follows general rules — specific KRA guidance is pending verification.

• Transaction tax: 3% Digital Asset Tax (Sept 2023 – 30 June 2025) — repealed by Finance Act 2025
• Current: 10% excise duty on VASP fees/commissions, effective 1 July 2025
• Holding-period rule: none

Travel rule applicability

Status: legislated — operationalisation pending. The VASP Act 2025 makes Travel Rule compliance an express obligation of licensed VASPs, alongside KYC/CDD, monitoring and suspicious-transaction reporting. Until the 2026 regulations are gazetted and licences issued, however, there is no supervised VASP population transmitting standardised originator/beneficiary data, and most flows still run through offshore or P2P channels. Context matters here: FATF placed Kenya on its grey list (increased monitoring) in February 2024, and the October 2025 FATF plenary kept Kenya on the list while progress on its action plan continues — a strong political incentive to get the VASP supervisory regime running quickly.

Notable events and enforcement

• December 2015. CBK public notice: virtual currencies are not legal tender, users have no protection; Banking Circular No. 14 of 2015 warns banks off virtual-currency dealings.
• 2 August 2023. The government suspends Worldcoin's activities in Kenya over the security of biometric data collected from citizens.
• September 2023. The 3% Digital Asset Tax takes effect under the Finance Act 2023.
• February 2024. FATF grey-lists Kenya for AML/CFT strategic deficiencies.
• 5 May 2025. The High Court (Justice Aburili Roselyne) rules Worldcoin's biometric collection unlawful under the Data Protection Act and the Constitution, ordering permanent deletion of Kenyans' biometric data under ODPC supervision within 7 days; the ODPC later confirmed deletion.
• 1 July 2025. Finance Act 2025 repeals the DAT; 10% excise duty on VASP fees takes effect.
• 15 October / 4 November 2025. President Ruto assents to the VASP Act 2025; the Act commences.
• 17 March 2026. Treasury publishes the Draft VASP Regulations, 2026 (comments to 10 April 2026); industry contests the KES 500M stablecoin-issuer capital floor.

Public licensed CASP list

None yet. The CBK and CMA have stated that licensing of virtual asset service providers begins only after the Virtual Asset Service Providers Regulations, 2026 are finalised and gazetted; as of this review no licences had been issued. Once the regulators publish their registers, DeFi Intel will mirror them. Any platform currently claiming a Kenyan VASP licence should be treated with suspicion.

Comparison to neighbours

Kenya is the regulatory front-runner of East Africa: none of its immediate neighbours has an equivalent enacted VASP licensing statute in force. Compare Kenya crypto regulation with three geographically adjacent jurisdictions:

Doing business in Kenya — practical notes

Kenya is in the gap between legalisation and licensing: the VASP Act 2025 is in force, but no licences can yet be obtained, so incumbents continue to serve Kenyan users from offshore entities while preparing applications. The near-term watch items are concrete — final gazetted text of the 2026 regulations (especially whether the KES 500M stablecoin-issuer capital floor and client-fund segregation rules survive industry comment), the split of licence categories between CBK and CMA, and the first supervisory guidance on Travel Rule implementation. The 2015-era banking blockade is formally obsolete — banks now have a statute and named regulators to anchor crypto-business relationships — but expect banks to wait for gazetted regulations and issued licences before onboarding at scale. Two compliance realities deserve emphasis: the 10% excise duty applies to platform fees now, regardless of licensing status; and Kenya's FATF grey-listing means enhanced scrutiny of Kenya-linked flows persists until FATF removes the country from increased monitoring.

Methodology and sources

This profile was researched and updated by DeFi Intel's research desk on 2026-07-14 from the primary and secondary sources listed below. Claims that could not be verified against a source are omitted or marked pending — we do not republish unverified third-party datasets. Submit corrections and primary-source links to research@defi-intel.com.

Sources

• Central Bank of Kenya — Public notice on commencement of the Virtual Assets Service Providers Act, 2025
• EY — Kenya enacts Virtual Asset Service Providers Act, 2025 (assent 15 Oct 2025; commencement 4 Nov 2025)
• Global Law Experts — Kenya's VASP Act 2025: CBK/CMA split, AML and Travel Rule obligations
• BanklessTimes — Kenya sets stiff crypto licensing terms as industry pushes back (Draft Regulations 17 Mar 2026; KES 500M)
• Capital FM — CBK, CMA: VASP licensing to begin after regulations are finalised
• KPMG — Kenya: tax changes in Finance Act 2025 (DAT repeal; excise duty)
• Deloitte Kenya — Excise duty meets crypto: the legislative gaps Kenya must close (10% on VASP fees, 1 July 2025)
• Central Bank of Kenya — Public notice: caution on virtual currencies such as Bitcoin (December 2015)
• Central Bank of Kenya — Banking Circular No. 14 of 2015: virtual currencies
• ICLG — Kenyan High Court delivers landmark biometric data ruling (Worldcoin, 5 May 2025)
• Business Daily — Worldcoin deletes Kenyans' biometric data after court order
• FATF — Jurisdictions under increased monitoring, 24 October 2025 (Kenya still listed)