Global and Africa-focused crypto firms, including Binance, Kotani Pay, VALR, Yellow Card, and Luno, are lining up to apply for virtual asset licences in Kenya, following the country’s gazettement of new crypto rules on July 24, as firms position themselves for an early regulatory foothold in one of Africa’s fastest-growing digital asset markets.

Between July 2024 and June 2025, Kenya recorded about $19 billion in crypto inflows, one of the largest in East Africa, according to blockchain analytics firm Chainalysis. Compared with the previous 12 months, it marked more than a twofold increase from about $7 billion, underscoring the rapid growth of digital asset activity in Kenya ahead of the new regulatory regime.

The licencing push marks a significant shift for Kenya’s digital asset industry, which has operated in uncertainty for years, despite being one of Africa’s largest crypto markets. The new Virtual Asset Service Provider (VASP) framework places exchanges, wallet providers, payment processors, and other digital asset firms under formal oversight by the Capital Markets Authority (CMA) and the Central Bank of Kenya (CBK), making Kenya one of the few African countries with a dedicated crypto licencing regime alongside jurisdictions such as South Africa—under the Financial Advisory and Intermediary Services (FAIS) Act—Mauritius, and Botswana. 

The framework also introduces paid-up capital requirements, with the highest threshold at KES 300 million ($2.3 million) for stablecoin issuers, setting the compliance bar for firms seeking to operate in Kenya’s regulated crypto market. 

Kenya’s regulatory shift comes as governments across Africa attempt to balance growing consumer adoption of crypto assets with concerns around financial crime, investor protection, and market stability. The country’s framework gives regulators visibility over virtual asset firms while establishing requirements around governance, compliance, and reporting. 

Yellow Card, a stablecoin infrastructure company operating in over 50 emerging markets including Africa, said it plans to apply for licences covering exchange platform and payment processing activities, with preparations already underway. The company expects to submit its application within three to four weeks once Kenyan regulators formally announce the licencing process, according to Edline Murungi, Yellow Card’s Group Head of Policy and Senior Legal Counsel. 

“Kenya is a key economy in Yellow Card operations, and with a positive outcome on the licencing, it would increase partnerships and business expansion,” Murungi told TechCabal in an emailed response.

Yellow Card, which said it has processed over $7 billion globally in the past twelve months, noted that becoming a regulated entity would likely introduce changes around reporting obligations rather than its core operations. It added that its existing compliance practices already align with many regulatory expectations provided in the VASP Regulations.

VALR, the South African cryptocurrency exchange that expanded into Kenya as part of its African growth strategy, also plans to seek approval under the new framework. Peter Mwangi, VALR’s country manager for Kenya, said the company expects to apply across virtual asset exchange operations, custody and wallet provision, and payment processing. 

“As part of our commitment to building sustainable, regulated digital asset infrastructure across Africa, obtaining local authorisation is a key priority for our long-term presence and expansion efforts in Kenya,” Mwangi told TechCabal in an emailed response. 

VALR said it is mapping its infrastructure against the new regulations, with expected adjustments around local reporting, governance requirements, and capital thresholds. The company, which has positioned itself as an institutional-focused digital asset infrastructure provider, said regulatory clarity could accelerate investment, including hiring local talent and expanding partnerships with banks and payment providers. 

Binance, one of the world’s largest cryptocurrency exchanges by trading activity, said it also intends to apply for a Kenyan licence after participating in the public consultation process for the regulations. The company declined to specify which licence categories it would pursue, noting that it remains focused on supporting policies around transparency, user protection, and sustainable growth. 

Larry Cooke, Head of Legal at Binance Africa, said the licencing process has been a two-year journey for the company and that Binance views the Kenyan framework as an important step toward building a regulated digital asset ecosystem. 

“No regulation is perfect, but this is a great start, and working with regulators that understand the dynamics of this industry is a major positive to the region,” Cooke told TechCabal in an emailed response. “We believe effective regulation is built through dialogue, combining global experience with local insight to create frameworks that are both robust and practical.”

Kotani Pay, a Kenyan-founded crypto company that has expanded across Africa, said it plans to apply for a VASP licence under the new framework. 

“Yes, we will apply for a VASP licence,” Samuel Kariuki, chief operating officer and co-founder of Kotani Pay, told TechCabal in an emailed response. “This is a matter under consideration with our compliance and risk assessment committee. Upon their review, they will advise accordingly. Preparations are underway; however, it’s too early to provide a definitive timeline for submitting our application.”

Luno, another Africa-focused crypto platform, said it also intends to participate in Kenya’s licencing process and is reviewing which categories best fit its long-term strategy. Apollo Sande, country manager for Luno Kenya, said the company is assessing licences that support its institutional business lines, including trading services, stablecoin treasury services, settlement capabilities, and embedded wallet services.  

“We are still reviewing the final regulations and determining the licence categories that best support Luno’s strategy and our long-term plans for Kenya,” Sande told TechCabal in an emailed response. “Based on Luno’s current institutional focus, we are assessing licence categories that support our B2B business lines, including our trading desk, stablecoin treasury services, global settlement capabilities and embedded wallet services. We are not in a position to confirm the final scope of our application at this stage.”

Industry executives in Kenya welcomed the introduction of formal rules, but some warned that implementation details will determine whether Kenya becomes a regional digital asset hub or creates barriers for innovation.

VALR said the framework’s definition of the regulatory perimeter, consumer protection measures, and recognition of stablecoin and payment activities were positive developments, but flagged the need for further consultation around stablecoin issuance requirements.

“The clear perimeter definition, emphasis on consumer protection, and formalisation of stablecoin and payment activities provide much-needed certainty that will attract institutional capital,” Mwangi said. “While compliance obligations and capital requirements are stringent, they establish a healthy bar for security, filter out bad actors, and could position Kenya as a leading, trusted digital asset hub in Africa.” 

“However, there are areas of the VASP regulations 2026 that could benefit from more consultation, such as the regulatory requirement, as they stand today, around stablecoin issuance. We will share our feedback with both CMA and CBK as soon as possible and look forward to collaborating with the regulator,” he added.

Yellow Card said it would closely monitor how reporting obligations under the new regulations are implemented, while Luno emphasised that the success of the framework would depend on execution by regulators and industry participants.

Kenya’s market appeal lies in its combination of established mobile money infrastructure, fintech adoption, and growing demand for alternative payment rails. For crypto companies seeking expansion in Africa, the licencing process could determine which firms gain an early foothold in a market expected to become competitive as more local and foreign operators enter the market.

Kenya’s rules-first approach

Kenya is among a handful of African countries—including Mauritius and Botswana—with dedicated regulations for virtual asset service providers, establishing requirements for capital adequacy, governance, consumer protection, and regulatory oversight. 

The regulatory clarity is expected to intensify competition in one of Africa’s fastest-growing digital asset markets, as global exchanges and regional crypto firms seek licences that could provide an early foothold in Kenya’s expanding crypto economy. 

Roqqu, a Nigerian cryptocurrency exchange that entered Kenya through its acquisition of Flitaa in 2025, said it is assessing the available licencing pathways under the new framework but declined to say whether it intends to apply for a licence or which categories it may pursue. 

“We are currently assessing all available pathways,” Ibitoye Roimot Yetunde, Roqqu’s chief compliance officer, told TechCabal in an emailed response. “Our priority is to ensure that we remain fully compliant with the applicable regulatory framework.”

Under Kenya’s VASP Regulations, virtual asset service providers can apply for one of 10 licence categories, with paid-up capital requirements varying according to the type of activity. 

Wallet providers must maintain paid-up capital of KES 150 million ($1.16 million), while exchanges require KES 100 million ($772,500). Payment processors, brokers, and tokenisation providers must maintain KES 10 million ($77,250). The threshold rises to KES 20 million ($154,500) for virtual asset managers, initial coin offering (ICO) providers, and token issuance platform operators. 

Stablecoin issuers face the highest paid-up capital requirement at KES 300 million ($2.3 million). Virtual asset investment advisors are exempt from minimum capital requirements but must maintain professional indemnity cover of at least KES 1 million ($7,725). 

Kenya is also moving towards a more formalised tax framework for virtual assets. While the Finance Bill, 2025 proposed a 3% tax on the transfer or exchange value of digital assets, the amended Finance Bill, 2026 shifts the approach to a 10% excise duty on fees charged by virtual asset service providers, aligning the tax with the assented Virtual Asset Service Providers Act. The proposal would also require providers to submit transaction information to the tax commissioner, with a KES 1 million ($7,732) penalty for each failure or omission. 

The approach contrasts with Nigeria’s tax-first strategy, where its taxman has introduced a 1.5% stamp duty on virtual asset transactions while the country is yet to have a clear crypto licencing framework comparable to Kenya’s. 

Taken together, Kenya’s licencing regime, capital requirements, and evolving tax framework could strengthen its appeal to crypto firms seeking regulatory certainty before committing capital and expanding across Africa. 

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