Stress test for regulation – The rollout highlights the tension between grassroots crypto use and formal oversight, testing whether Kenya can balance innovation with safety and compliance.
Kenya’s much-anticipated Virtual Assets Service Providers (VASP) Act officially came into force, setting up a legal structure for exchanges, custodial wallets, and other crypto‑platforms.
A local media outlet, Capital News, announced that several major malls across Nairobi had new machines branded “Bankless Bitcoin” installed beside traditional banking kiosks, offering cash-to-crypto services to the locals. Under the law, the Central Bank of Kenya (CBK) will oversee payment and custody functions, while the Capital Markets Authority (CMA) regulates trading and investment services.
Yet, despite the law being in force, no Virtual Asset Service Providers (VASPs) have been licensed. As the CBK and CMA jointly warned,
“any firm claiming to be licensed is doing so illegally.”
The delay stems from the fact that detailed regulations, which will spell out how to apply for licences and operate under the Act, have not been published yet by the National Treasury.
Barely days after the new law took effect, bright orange “Bankless Bitcoin” ATMs started appearing in several of Nairobi’s major shopping malls — including Two Rivers Mall in Gigiri, Westlands, and along Ngong Road. These kiosks enable cash-to-Bitcoin (BTC) transactions, placing crypto infrastructure right beside conventional bank ATMs.
But their high‑visibility rollout is raising eyebrows among regulators. With no authorised VASPs yet, the ATMs are operating in a regulatory grey zone. Critics warn this mismatch undermines the credibility of the new law and could expose consumers who believe they’re transacting legally when, in fact, no licence has been granted.
CBK and CMA issued a notice which stated that neither regulator has licensed any VASP under the new laws to operate in or from Kenya. The central bank said,
“The National Treasury is already developing and will issue regulations that will determine when the licensing can start.”
This isn’t Kenya’s first flirtation with BTC. In lower‑income areas like Kibera, crypto has long been a grassroots tool. Fintech startup AfriBit Africa has been paying workers in BTC via grants, and some boda‑boda riders and merchants accept BTC payments over the Lightning Network. For many in these communities, BTC offers a way to hold value without needing formal IDs, bank accounts, or traditional financial paperwork — what one co‑founder called a form of “financial freedom.”
Now, with ATMs in upscale malls, crypto is making a tangible leap into Kenya’s formal economy. But the timing — before licensing is live — spotlights a tension between informal innovation and formal regulatory control. As the VASP regime begins to take shape, this moment serves as a stress test: can Kenya balance consumer protection and financial crime safeguards while allowing crypto to scale in public, regulated spaces?
