5 Ways Kenya’s Virtual Asset Service Providers Bill Will Transform Crypto Payments

Kenya is once again setting the pace for digital finance innovation in Africa. Building on the runaway success of M-Pesa, the country’s updated 2025 Virtual Asset Service Providers (VASP) Bill is poised to reshape the future of cryptocurrency regulation and usage.

By providing a principled regulatory framework, the Bill bridges innovation with compliance, unlocking major opportunities for fintech players, SMEs, and diaspora communities alike.

Here are five key ways the VASP Bill will transform crypto payments in Kenya:

Creating regulatory clarity and building investor confidence

The VASP Bill introduces Kenya’s first full regulatory framework for cryptocurrency service providers. It includes formal licensing by the Capital Markets Authority and the Central Bank of Kenya, minimum capital requirements, and operational standards that help legitimize virtual asset services.

This level of regulatory certainty will help eliminate the grey areas that have previously slowed down innovation or made traditional financial institutions hesitant to engage with cryptocurrency and other virtual assets. For digital payment providers, this clarity offers a defined path to building regulated, compliant services at scale. Additionally, Kenya’s regulatory clarity could boost its appeal as a crypto hub, echoing global trends where jurisdictions like Dubai and Singapore have gained prominence through similar regulatory moves.

Reducing remittance costs 

Remittances are a lifeline for millions of Kenyan households. In 2023 alone, the country received over $4 billion in diaspora remittances. Yet sending money home can still be expensive with fees ranging from 5% to 15%, depending on the provider.

Cryptocurrency, when deployed responsibly, can reduce these costs to under 2% which means the VASP Bill could pave the way for better regulation of cryptocurrency exchanges and remittance platforms, stimulating innovation as well as cheaper, faster, and safer ways for Kenyans abroad to support their families.

With clear guidelines in place, we expect to see more service providers enabling diaspora users to remit funds in digital assets, seamless conversion to Kenyan Shillings through licensed exchanges and direct withdrawals into M-Pesa wallets. This interoperability between cryptocurrency and mobile money dramatically improves financial access and efficiency.

Strengthening anti-money laundering

One of the most forward-looking aspects of the VASP Bill is its emphasis on compliance. The legislation aligns with global best practices, such as the Financial Action Task Force (FATF) guidance on digital assets, by requiring robust know-your-customer (KYC) and anti-money laundering (AML) procedures. This is further reinforced by Kenya’s recently enacted AML framework, which broadens the scope of reporting institutions and enhances enforcement powers, signalling the government’s firm stance on combating financial crime across both traditional and digital finance ecosystems.

Licensed VASPs thus need to strengthen customer due diligence, maintain detailed transaction records, and monitor for suspicious activity. These aren’t just checkboxes, they’re essential for building a credible, secure digital finance ecosystem that regulators, banks, and users can trust.

These enhanced frameworks enable better integration with traditional banking services and allow for deeper collaboration with traditional financial institutions and regulators, fortifying the bridge between cryptocurrency and the wider economy.

Enabling SME integration 

Small and medium enterprises represent over