Kenya Drafts Stringent VASP Rules Amid FATF Grey Listing
Kenya’s National Treasury has unveiled draft regulations for virtual asset service providers (VASPs), introducing rigorous licensing and reserve requirements for stablecoin issuers. The move follows Kenya’s February 2024 inclusion on the FATF grey list, which highlighted deficiencies in anti-money laundering controls. Public feedback on the proposals is open until April 10, with implementation slated for November 2025 under the Virtual Asset Service Providers Act.
The new framework expands eligibility for VASP licenses to include limited liability partnerships, a departure from previous restrictions limiting participation to corporate entities. Regulatory responses to license applications must now be issued within 90 days. A multi-agency task force—comprising the Central Bank of Kenya and Capital Markets Authority—developed the rules to address FATF-identified vulnerabilities in Kenya’s financial oversight regime.
