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CBK, CMA to jointly regulate crypto sector in proposed rules
Central Bank of Kenya governor Kamau Thugge (left) and Capital Markets Authority CEO Wycliffe Shamiah. The two institutions will become crypto regulators if Parliament passes the law.
The Central Bank of Kenya (CBK) and the Capital Market Authority (CMA) will jointly regulate the cryptocurrency industry in the country if lawmakers approve a proposed law that seeks to guide the use of such digital assets.
Cryptocurrencies, or virtual assets, are digital forms of money or value that are not issued or controlled by any particular monetary authority and are traded online.
The sector, which has an estimated 730,000 users in Kenya, has remained largely unchecked, with both the CBK and the CMA cautioning their licensees against engaging in business with players in the sector.
The Virtual Asset Service Providers Bill of 2025, prepared by the National Treasury, has designated the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA) as the regulators of the sector.
If passed, the new rules will force the CBK – which regulates the financial sector – and CMA – the capital markets regulator – to work together to oversee the crypto industry, something both organisations have traditionally avoided.
“The following entities shall be the relevant regulatory authorities for the purposes of this Act — the Capital Markets Authority established under Section 5 of the Capital Markets Act; the Central Bank of Kenya established by Article 231(1) of the Constitution,” reads the Bill set to be tabled in Parliament.
CBK will regulate crypto service providers that offer payment and currency-related solutions, while the CMA will regulate companies that offer trading, exchange and initial public offerings (IPOs) of virtual assets.
The regulators will have the power to license industry players, approve IPOs of virtual assets, supervise promoters of virtual assets and generally regulate the activities of players in the industry.
They will also be required to collaborate with other regulators in the country and share information about their licensees and their activities to assist in investigations or inquiries and to strengthen anti-money laundering and counter-terrorist financing.
Ensuring financial stability and market integrity, fostering innovation in the crypto industry and preventing any conduct that may damage Kenya’s financial reputation will be the guiding principles of the regulators in the industry.
The two regulators will oversee crypto wallet providers, exchanges, payment processors, brokers, investment advisors, asset managers, initial coin offering providers, administrators and miners, all of which will be required to secure a licence from the regulators.
Currently, neither the CBK nor the CMA recognise crypto entities and their activities are completely unregulated in the country.
CBK has a standing circular banning commercial banks from doing any business with crypto companies, while the CMA in 2018 cautioned Kenyans against participating in unregulated initial coin offerings, which will now come under its watch in the new rules.
The regulation of the sector by two different regulators is a departure from the direction taken by South Africa and Botswana, Namibia, and Mauritius – the only African countries with standing crypto regulations – all of which have designated a single regulator to oversight the industry.
It is, however, akin to the United States, where the crypto industry is regulated by both the Securities Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), although both are capital markets regulators.