Elijah Ntongai, an editor at TUKO.co.ke, has over four years of financial, business, and technology research and reporting experience, providing insights into Kenyan, African, and global trends.

Virtual asset service providers operating in Kenya will be required to pay tax on the fees charged on virtual asset transactions.

The Kenya Revenue Authority (KRA) has issued a public notice listing "fees charged on virtual asset transactions by virtual asset providers" as an excisable service in line with the Finance Act 2025.

According to the notice, virtual asset providers will pay a 10% excise duty on all the fees charged on cryptocurrency transactions.

The update comes as the country prepares for the signing of the Virtual Asset Service Providers (VASPs) bill 2025, which is set to establish a legal framework for the regulation and licensing of players in the virtual assets industry.

In the new regulations, VASPs will be required to apply for licences from the relevant bodies, particularly the Central Bank of Kenya (CBK) or the Capital Markets Authority (CMA).

The new framework will place virtual asset wallets under the CBK and assign oversight of virtual asset investments, exchanges, token platforms, and initial coin offerings (ICOs) to the CMA.

The government will apply stricter licensing conditions, such as requiring VASPs to maintain a physical office in Kenya to enable regulatory inspections and expand their board to at least three natural-person directors.

New compliance obligations include penalties of up to KSh 3 million for individuals and KSh 10 million for companies found engaging in misleading marketing. VASPs will also have to comply with the Data Protection Act, 2019.

In other news, the Kenyan government has affirmed its commitment to digital assets by welcoming the Kenyan Digital Token (KDT), a privately developed token built on Solana blockchain.

This is part of its broader strategy to integrate cryptocurrencies into the national economy.

Speaking during the KDT launch on July 11, 2025, Information, Communications, and the Digital Economy Cabinet Secretary William Kabogo highlighted the government’s vision to transform Kenya into a leader in blockchain innovation, stablecoin development, and even potential Bitcoin reserves.

He described KDT as a low-cost, scalable solution aligned with the national policy of enhancing digital inclusion and reducing latency.

Kabogo noted that Kenya currently trades over KSh 64.6 billion ($500 million) in digital assets monthly and ranks 28th globally and fourth in Africa in crypto adoption.

The KDT launch marked a significant step in legitimising digital finance in Kenya. The government has pledged to support innovators, enhance consumer trust, and open up access to global markets through blockchain-driven growth.

Source: TUKO.co.ke