Central Bank of Kenya(CBK) will impose hefty fines of upto KSh 30 million for firms that engage in illegal issuance of cryptocurrencies, including bitcoin and stable coin. The same harsh penalty awaits individuals who face a fine of KSh 3 million, imprisonment or both. This is a recently passed crypto bill is signed into law.
According to the Virtual Asset Service Providers Bill 2025, that has been passed by Parliament and now awaits Presidential Assent, the proposed law seeks to provide a legislative framework to regulate cryptocurrency providers and address potential risks associated with the misuse of these virtual asset products.
Kimani Kuria, Chairman of Parliament’s Finance Committee, said this Bill has been passed amid worries over lack of rules to govern a booming virtual assets sector.
If signed into law, Kenya will join South Africa as the only two African Countries with laws that govern crypto currencies.
In the list of firms and individuals that CBK will target under the new Crypto Currency Rules include Corporate and Retail wallet providers, digital online platforms facilitating virtual asset transfers and exchanges, Trading, Clearing and Settlement Platforms, Payment Processors and Gateways, Brokers and Investment Advisers.
Also placed under the supervision radar of CBK and Capital Markets Authority(CMA) are Asset Managers dealing with portfolios that include crypto currencies, those that deal in the process of converting real-world assets like real estate, art, or commodities into digital tokens on a blockchain.
CBK will also monitor those holding a virtual asset in trust until all parties have successfully met the transactions obligations.
Further, all those Institutional units that validate and confirm crypto transactions will be on the radars of Communication Authority of Kenya(CAK).
CBK is stepping up its surveillance of the crypto currency space as countries anticipate a boom is US-Dollar-backed stablecoins that analysts warn could disrupt developed economies’ own currencies.
Legal clarity in Kenya’s Cryptocurrency space is expected to attract huge investments into this technology segment including from crypto exchanges like Binance and Coinbase.
Kenya’s growing GenZ and Millennials increasingly using crypto currencies and other virtual assets for trading, settling payments and as a way of investment or doing business.
Although the digital assets industry has grown exponentially across the world in the last decade, regulation has been an area of concern as governments wrestle with ways of preventing criminals from taking advantage of the anonymity of the systems.
The draft Kenyan Crypto law has borrowed heavily from the US and Britain as well as other developed economies.
The proposed Kenyan Crypto rules comes when a glowing list of firms have embraced Bitcoin as a means of transacting business.
A number of e-commerce websites and digital service providers are already accepting and processing payments through Bitcoin.
Additionally, Bitcoin is now a popular exchange is the transaction of huge volumes of Kenyan cross-border trade, enabling merchants to receive payments with ease, without having to go through the tedious, more expensive and time-consuming platforms that are operated mostly by banks.
More Fintechs in Kenya are able to deliver services through The Lightning Network- a platform that is effective and more efficient, executing transactions using Bitcoin. A few merchants and service providers have joined the fray and enabled payments in Bitcoin without the need for a fiat bank account.
In addition to this, the application of Bitcoin in real estate transactions is gaining some traction in Kenya.
CBK surveillance comes as more real estate developers and property dealers use cryptocurrencies to facilitate the selling of properties to foreigners, providing buyers with an alternative to costly bank channels and a route out of changing exchange rates. Herein lies the risk of money laundering and hiding of ill-gotten wealth by criminal gangs.
Kenyans use cryptocurrencies like Bitcoin and Ethereum for remittances, investments, trading, digital payments as well as for speculative purposes-some individuals buy and sell cryptocurrencies in hopes of locking in gains from price fluctuations.
CBK aims to police this sector so as to attract more investments, protect users and combat financial crimes.
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