National Treasury Unveils Draft VASP Regulations 2026: A Formal Era for Digital Assets

Following the enactment of the VASP Act in late 2025, the National Treasury—working through a Multi-Agency Task Force—has moved to set the ground rules for digital asset operators in Kenya. The draft regulations, published in mid-March 2026, require all virtual asset exchanges, wallet providers, and stablecoin issuers to obtain formal authorization to operate. A key pillar of the new rules is Consumer Protection, mandating the segregation of client funds from company operational accounts and the implementation of robust cybersecurity and dispute-resolution systems. However, the draft has sparked intense debate within the fintech community due to its Stiff Capital Requirements. For instance, stablecoin issuers are proposed to hold a minimum paid-up capital of Sh500 million (approx. $3.86 million), a threshold that industry groups like the Virtual Asset Association of Kenya (VAAK) warn could stifle local startups and favor well-capitalized international firms. The regulations also enforce strict Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) standards, requiring real-time on-chain monitoring and "fit-and-proper" vetting for all senior management. Why this matters For the broader economy, these regulations represent the "institutionalization" of digital assets. By bringing crypto under the purview of the CBK and CMA, the government is signaling that it views blockchain technology as a legitimate component of the national financial system rather than a fringe activity. While the compliance costs are high, the move is expected to attract "quality" foreign investment and pave the way for institutional-grade products, such as tokenized real estate and money market funds, which were previously stalled by regulatory uncertainty. Opportunity sector RegTech & Compliance Services: Massive demand for automated AML/KYC tools and on-chain analytics platforms that help VASPs meet the new reporting requirements. Institutional Custody: A major opening for banks and specialized firms to offer "vetted" custodial services for digital assets, now that a legal framework for safekeeping exists. Tokenization Projects: The clarity provided by the CMA's oversight allows for the scaling of tokenized assets in real estate and infrastructure, areas previously restricted to the regulatory sandbox. Legal & Advisory: High demand for professional services to guide existing crypto firms through the complex licensing and "fit-and-proper" documentation process before the transition period ends. Moto Seen Africa — Africa’s View, Seen Clearly. #VASPAct2026 #DigitalAssets #KenyaFintech #CryptoRegulation #TreasuryKenya #BlockchainAfrica #MotoSeenAfrica #Vision100