More than 50 cryptocurrency firms in Kenya have banded together to form a new industry umbrella body as the government prepares to roll out regulations governing the licensing of virtual asset service providers under recently enacted law.
The Virtual Asset Association of Kenya (VAAK) was officially launched on Tuesday in Nairobi’s Upperhill district, stepping into a regulatory environment reshaped by the Virtual Asset Service Providers Act, which received presidential assent in October. The law introduces formal oversight of the crypto sector through a coordinated framework involving the Central Bank of Kenya and the Capital Markets Authority.
Under the new regime, the CBK will supervise payment-facing crypto businesses such as stablecoin operators, conversion platforms and custodial services, while the CMA will regulate tokenised assets, crypto exchanges, trading platforms and other virtual asset service providers.
VAAK chair Dr Peter Onyango said the association’s formation signals the industry’s readiness to operate within a clear legal framework. He noted that predictable and balanced regulation would strengthen consumer protection, enhance market integrity and allow compliant firms to grow sustainably.
The move follows months of tension between crypto players and policymakers over how best to rein in a fast-growing sector. Those debates have sharpened industry focus on compliance, credibility and customer safeguards, all of which are now central as firms prepare for the licensing process.
Participants at the launch, ranging from local fintech startups to regional and international operators, indicated they intend to apply for licences once the Treasury finalises the subsidiary regulations required to operationalise the law.
The new rules will require virtual asset firms to maintain physical offices in Kenya, appoint individual directors, separate customer funds from company assets, hold accounts with local banks and comply with tougher anti-money laundering, counter-terrorism financing and data protection standards. These measures are designed to address long-standing concerns about offshore operators serving the Kenyan market without sufficient local accountability.
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Homegrown companies are seeking to use the moment to help shape Africa’s wider regulatory direction. Firms such as Kotani Pay, which already holds a licence in South Africa, see the framework as an opportunity to validate local compliance practices and distinguish themselves from foreign players that previously benefited from regulatory gaps.
Kotani Pay chief operating officer Samuel Kariuki said aligning with the new rules and seeking licensing would boost consumer confidence, draw global investment and reinforce Kenya’s position as a leader in regulated digital asset innovation.
The legislation’s requirement for annual licence renewals and the introduction of stiff penalties, including fines of up to KSh 25 million, are expected to speed up consolidation in the sector and push out weaker or non-compliant operators.
VAAK members say they plan to work closely with regulators as detailed operational guidelines are developed, particularly on issues such as IT audits, custody arrangements and the treatment of stablecoins. Although some industry players had argued for a separate regime for foreign-issued stablecoins, the law ultimately classifies them under the broader virtual asset category, reflecting a cautious approach aimed at aligning with global standards and avoiding international compliance risks.
Beyond domestic regulation, the association also wants to help shape Kenya’s standing in global digital finance. As policymakers seek to brand the country as a regional technology hub, the industry sees an opening to transition from an informal, lightly monitored market into a structured system that reassures investors and strengthens Kenya’s fintech reputation across the continent.
