Kenya has long been at the forefront of technological innovation in Africa. The success of M-Pesa is testament to our ability to leverage technology for financial inclusion, transforming how millions of Kenyans and Africans transact.
Now, with the recently introduced Virtual Asset Service Providers Bill, 2025, we have an unprecedented opportunity to shape the future of digital finance in Kenya and across the continent.
As the CEO of TapSwap Exchange, an African crypto exchange built for the African market, I see the VASP Bill as more than a regulatory initiative. It is a clarion call for Africa to embrace the transformative potential of cryptocurrency and blockchain technology.
At TapSwap, our vision has always been to provide a gateway to the global financial system for millions of Africans. The introduction of the VASP Bill therefore is a welcome step towards legitimising the crypto industry in Kenya.
South Africa, for example, has already set a high benchmark in Africa by introducing regulations through the Financial Sector Conduct Authority.
In 2024, the FSCA issued more than 200 crypto licenses, positioning South Africa as a leader on the continent in adopting secure and forward-thinking crypto policies.
Kenya risks being left behind if we fail to implement clear, actionable frameworks that foster innovation and attract investment.
Regulation, when thoughtfully crafted, can foster trust by creating a safer environment for users, significantly reduce scams and encourage participation in the crypto ecosystem.
Clear regulatory frameworks provide a level of certainty that attracts both local and international investors, essential for the growth of the digital economy.
Such regulatory measures also enhance consumer protection by ensuring fairness and transparency through promotion of ethical practices within the industry.
One of the VASP Bill’s commendable provisions is its emphasis on addressing low levels of public awareness and literacy regarding virtual assets.
Education and capacity-building initiatives are vital to fostering informed participation in the crypto ecosystem. Already, we have startups like Kotani Pay and TapSwap Exchange that are complementing these efforts by providing educational resources and community engagement programs to empower users.
While the VASP Bill introduces much-needed regulation, it is imperative that the government revisit the Digital Assets Tax (DAT) under Section 12(F) of the Income Tax Act.
The current tax framework:
1. Lumps together distinct activities: It fails to distinguish between personal investment and business activity, leading to unfair taxation of long-term holders who derive no immediate income from their assets.
2. Lacks clarity on taxable events: Transferring crypto between wallets owned by the same person is not a value-creating event, yet it is taxed the same as a profitable trade or sale.
3. Ignores the unique nature of crypto transactions: The simplified approach does not account for the complexities of valuing and transacting in digital assets.
The writer is the
CEO of TapSwap
Exchange