The Virtual Assets Chamber is advocating for a tiered licensing regime in Kenya's draft Virtual Asset Service Provider (VASP) Regulations 2026. This, writes Maryanne Njuguna, the Chamber's Business Development Lead and Policy, ensures that fees and capital requirements stay proportionate to the size and risk of the provider, keeping the market accessible for local innovators.
Kenya is moving. The release of the draft Virtual Asset Service Provider (VASP) Regulations 2026 marks a departure from purely fiscal interest toward a comprehensive oversight regime. With a feedback window closing on April 10, 2026, the industry is currently mobilizing to ensure these rules build a bridge to global markets rather than a wall around the local ecosystem.
While the VASP Act, 2025 serves as the broad framework, the current draft regulations provide the operational "how-to". For these rules to actually work on the ground, they require public participation. Leading this charge is the Virtual Assets Chamber (VACC). As a policy think tank, the group is working to ensure Kenya remains a viable home for digital asset businesses by setting higher professional standards while warning against what they call "premature harvesting".
The High Stakes of Regulatory Design
Heavy fees risk stifling the industry before it has the mass to survive. At the Office of the Special Envoy Roundtable on March 26, 2026, participants pointed to India’s experience, where aggressive taxation led to a massive exodus of capital, as a cautionary tale. Kenya must remain commercially viable for startups to avoid a similar collapse.
The VACC is currently tackling three main pillars of concern within the draft:
- •Licensing and Renewal Fees: The draft proposes renewal fees based on a percentage of turnover, which is a massive hurdle for an industry where profit margins often sit in the single digits.
- •Capital Requirements: Demanding up to KSh 500 million for stablecoin issuers heavily favors established banks over lean, innovative startups.
- •The Compliance Burden: The frequency of manual reporting acts as a resource drain that leaves little room for actual technical innovation.
The Chamber is advocating for a tiered licensing regime instead. This ensures that fees and capital requirements stay proportionate to the size and risk of the provider, keeping the market accessible for local innovators.
Real Action Through the Standards Council
Taking its work beyond simple lobbying, VACC recently launched the Virtual Assets Standards Council to act as a coordination layer between the Nairobi Securities Exchange (NSE), Binance, and Vifi Labs. This group is focused on fixing the trust gaps between traditional banking and decentralized finance.
Instead of just waiting for the government to hand down technical rules, the Council is setting industry benchmarks for stablecoins and tokenized assets. They want to move the sector away from being seen only as crypto exchanges and toward being recognized as the infrastructure for the future of finance. This involves proving that onchain lending and 24/7 settlement actually work for the Kenyan market today.
Solving the Knowledge Gap
At the roundtable, Ambassador Philip Thigo reminded the industry that regulators require time and data to build capacity. For maximum effectiveness, every proposal should have proven facts, comparative analysis, and data to back it up.
The VACC has responded by launching the Virtual Assets Institute. This wing is designed to equip traditional financial institutions and regulators with the technical knowledge required to supervise and operate effectively. Through its Compliance Accelerator, the Institute provides institutional upskilling bootcamps to prepare entire workforces for the rigors of modern supervision.
A Unified Roadmap to April 10
To close the roundtable, the Virtual Assets Chamber outlined five strategic priorities to ensure the implementation of the Act supports growth:
- •Capacity Building: Technical training for regulatory agencies to oversee a fast-moving sector.
- •Reciprocity: Mechanisms where licenses from comparable jurisdictions are recognized to reduce friction.
- •Ease of Business: Adjusting fees and capital requirements to be proportionate to provider size.
- •Resolving the Banking Deadlock: Addressing the "chicken and egg" scenario where a VASP cannot get licensed without proving capital, yet cannot open a bank account to hold that capital without a license.
- •Presidential Engagement: A session with the President of Kenya to formally recognize the sector as a pillar of technology-led economic growth.
As the April 10 deadline approaches, the VACC remains a quality vehicle for a unified industry response. The Chamber invites stakeholders to make submissions through their collective platform to ensure a single, powerful voice.
