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:

1. 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 legitimise 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.

2. 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.

3. 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.

4. Enabling SME integration

Small and medium enterprises represent over 90% of Kenyan businesses but many face challenges such as high payment processing fees and wider access to international markets.

The VASP Bill creates opportunities for local businesses to accept payments in digital assets, offering a faster and cheaper alternative to cards or wire transfers. Additionally, SMEs will be able to sell to global customers without the need for complex cross-border banking. A Nairobi-based artisan, for instance, could receive payment in cryptocurrency from a buyer in New York and convert it to Kenyan Shillings through a licensed Kenyan exchange, without delays or heavy bank fees.

The Bill also ensures that platforms provide educational support by providing clear information about risks, benefits, and best practices, ensuring small business owners are able to make informed decisions about cryptocurrency payment integration.

5. Enhancing cross-border trade

Kenya plays a vital role as East Africa’s trade gateway, but cross-border payments remain slow and expensive. With the VASP Bill in place, regulated cryptocurrency platforms will be able to support real-time cross-border payments at lower costs. For importers and exporters, this means faster settlement, better cash flow, and fewer transaction fees.

More advanced use cases, like smart contract–powered escrow services, could also become viable. Imagine a scenario where a small Kenyan exporter is automatically paid the moment a delivery is confirmed, with funds held securely in escrow until that point. That kind of innovation reduces risk and drives new trade relationships, especially within the AfCFTA framework.

The VASP Bill represents Kenya’s strategic decision to lead Africa’s cryptocurrency evolution through principled regulation. By creating a framework balancing innovation with compliance, Kenya could position itself as the continent’s digital finance capital whilst addressing legitimate concerns about financial stability and consumer protection.

This transformation builds on Kenya’s mobile money success, leveraging the same financial inclusion and technological innovation principles that made M-Pesa globally influential. As digital assets become a larger part of our financial lives, this legislation provides a thoughtful, balanced foundation for the future. And for millions of Kenyans – whether they’re running a business, sending money home, or exploring new ways to manage their money – that future is looking more inclusive than ever.