Kenya's VASP transition ends on the Act's section 47
Kenya's Virtual Asset Service Providers Act grace year ends on section 47, not section 48. The Central Bank and the markets authority split every licence.
On November 4, 2026, the one-year transitional period in section 47 of the Virtual Asset Service Providers Act, No. 20 of 2025, runs out for a person already providing virtual asset services at commencement. Kenya Law heads that section "Transitional and saving provisions" and requires compliance within one year of commencement on November 4, 2025. Digital Policy Alert's licensing entry dates the expiry to section 48, while its authorisation entry dates the same expiry to section 47.
Section 48 is the consequential-amendments section, and the Second Schedule amends the Capital Markets Act, the Central Bank of Kenya Act, the National Payment System Act and the Proceeds of Crime and Anti-Money Laundering Act. Section 49 is the power under which the Cabinet Secretary for the National Treasury, advised by the authorities, made Legal Notice 134 of 2026, published and commenced on July 22, 2026. For a Kenya VASP, the live question is which authority must license each activity before that year is spent.
What the Central Bank and the markets authority each license
Section 5 names the Capital Markets Authority and the Central Bank of Kenya. Section 6 licenses against the First Schedule. The Central Bank takes custodial wallets, where a third party holds the private keys, payment gateways arranging transactions between virtual assets and fiat or between virtual assets, and stablecoin issuance. Regulation 67 sends a stablecoin application to the Central Bank, and regulation 14 requires its authorisation before a person converts virtual assets to or from foreign currency.
The Authority takes exchanges, trading, clearing and settlement platforms, client brokerage, investment advice and discretionary management. Regulation 49 sends an initial coin offering to the Authority under section 34, and regulation 61 does the same for tokenisation. A firm that holds client keys and also matches orders answers to both authorities, a split closer to the gap between filing and a mandatory start in the Financial Conduct Authority cryptoasset gateway than to a single crypto supervisor.
Paid-up capital in the Fifth Schedule
The Fifth Schedule puts initial coin offerings at KSh 20 million and tokenisation at KSh 10 million, a split some client notes fold into one band.
| Licence | Authority | Paid-up capital |
|---|---|---|
| Stablecoin issuance | Central Bank of Kenya | KSh 300 million |
| Wallet provider | Central Bank of Kenya | KSh 150 million |
| Exchange | Capital Markets Authority | KSh 100 million |
| Virtual asset manager | Capital Markets Authority | KSh 20 million |
| Initial coin offering | Capital Markets Authority | KSh 20 million |
| Token issuance platform | Capital Markets Authority | KSh 20 million |
| Tokenisation | Capital Markets Authority | KSh 10 million |
| Payment processor | Central Bank of Kenya | KSh 10 million |
| Broker | Capital Markets Authority | KSh 10 million |
| Investment adviser | Capital Markets Authority | Nil |
Regulation 2 defines paid-up capital as issued and fully paid ordinary shares. Regulation 85(6) adds 50% of each further activity on top of the highest line, so a stablecoin issuer that also runs an exchange needs KSh 350 million, a fixed floor unlike the Canadian proposal for non-bank stablecoin issuers.
The offence in section 8 and the penalty in section 40
Section 8(2) requires a licence before a person carries on, or holds itself out as carrying on, a virtual-asset business in or from Kenya. Section 8(1) admits a company limited by shares under the Companies Act, or a foreign company limited by shares registered under that Act. Section 8(3) makes the breach an offence, and section 40(3) sets an individual fine of up to KSh 10 million or imprisonment for up to five years, or both, and a company fine of up to KSh 25 million. Regulation 4 catches a person who solicits Kenyan consumers or derives income from Kenya.
Why a complete file can still miss the statutory year
The authorities' joint notice of November 18, 2025 said regulations were still being drawn, that licensing would open once they were issued, and that the book was empty then. Legal Notice 134 commenced on July 22, 2026, 105 days before the section 47 year ended. Made under section 49, it supplies the licensing machinery and leaves the one-year sentence standing.
Regulation 6(4) allows 30 days once the file is complete and due diligence is finished, so a late application can still be open on November 4. Edwin Maina, principal at Hodari Ventures, wrote on September 18, 2026 that firms should "Treat 4 November 2026 as the date by which you need to hold the licence, not merely to have applied." Section 47 requires compliance with the Act, including section 8(2). A business that started after November 4, 2025 is inside section 8(2) from its first day, because the transitional sentence is framed upon commencement.
A granted licence is a different fact from a filing, and capital separates the seats, as it does on the Bank of Russia's three crypto registers. The transitional section on the face of the Act is 47.
This article is informational analysis only and is not financial, investment, or trading advice.
Reporting by Karthik Subramanian. Filed 4 November 2026, 12:22 GMT.
Digital Assets Correspondent
Karthik Subramanian is a founder, writer, and technology consultant with nine years in the crypto ecosystem.
