Kenya is at a pivotal moment with the impending Virtual Asset Service Providers (VASP) Bill, 2025, a comprehensive regulatory framework aimed at legitimizing its booming digital asset industry. While praised for bringing clarity and consumer protection, experts caution that its implementation must carefully balance innovation with oversight to avoid stifling the vibrant crypto community.

• The VASP Bill, 2025 seeks to regulate Kenya's Web3 ecosystem, which is significantly driven by youth-led startups.
• Larry Cooke, Africa head of legal counsel at Binance, stresses the need for VAT exemption on digital asset transactions to foster innovation.
• Benjamin Arunda, Africa’s first blockchain-published author and chair of the Africa Blockchain Council, views the Bill as an opportunity for crypto startups to shed legal ambiguities.
• Concerns include potential overemphasis on consumer protection with stringent KYC and KYT requirements, which may undermine crypto’s anonymity and favor large capital players over local startups, as noted by Roselyne Wanjiru, a Nairobi-based blockchain research analyst.
• Experts highlight implementation challenges, especially concerning decentralized finance (DeFi) platforms, and the need for regulators to acquire deep virtual asset expertise.