The bright orange machines, branded “Bankless Bitcoin,” now sit alongside traditional bank ATMs in high-traffic malls, creating an unexpected regulatory challenge for authorities who say no crypto operators have been licensed yet.
The timing has created what experts call a “stress test” for Kenya’s new regulatory framework. While the Virtual Assets Service Providers Act became law on November 4, 2025, the licensing system isn’t ready to operate.
New Law Creates Regulatory Framework
Kenya’s Virtual Assets Service Providers Act established the country’s first formal rules for cryptocurrency businesses. The law assigns oversight duties to two main regulators: the Central Bank of Kenya (CBK) handles payment and custody functions, while the Capital Markets Authority (CMA) regulates investment and trading activities. The Communications Authority oversees technology infrastructure supporting virtual asset services.
The legislation requires all crypto exchanges, wallet providers, and token platforms operating in Kenya to obtain proper licenses. Companies must meet strict requirements including minimum capital levels, annual audits, cybersecurity protocols, and anti-money laundering compliance.
Parliament passed the bill in October after months of committee review and public consultation. Finance Committee chair Kimani Kuria called it “a landmark moment for Kenya’s financial ecosystem” that provides clarity while protecting consumers from fraud.
Source:@CBKKenya
The law also changed how Kenya taxes cryptocurrency. The government removed a 3% tax on transaction values and replaced it with a 10% excise duty on platform fees. This shift makes the tax system friendlier for long-term crypto holders.
Bitcoin ATMs Arrive Despite Licensing Gap
The new Bitcoin ATMs appeared at shopping centers including Two Rivers Mall, locations in Westlands, and along Ngong Road. The machines allow users to buy and sell Bitcoin using cash, bringing cryptocurrency services into mainstream retail spaces.
However, regulators quickly issued warnings. In a joint notice on November 18, the CBK and CMA stated that no Virtual Asset Service Provider has been licensed under the new law. Any company claiming authorization is operating illegally, they warned.
“Currently CBK and CMA have not licensed any VASPs under the Act to operate in or from Kenya,” the central bank said. The National Treasury is still developing regulations that will determine when licensing can begin.
This creates a visible mismatch. Crypto infrastructure is entering public spaces while regulators tell citizens that no operator has proper authorization. The situation raises questions about enforcement and compliance in Kenya’s crypto sector.
Kenya has seen Bitcoin ATMs before. In 2018, BitClub installed similar machines in Nairobi, but they never reached mainstream retail areas and saw limited adoption. Current data shows only two Bitcoin ATMs officially registered in Kenya.
Grassroots Adoption Predates Formal Infrastructure
While Bitcoin ATMs are new to Nairobi’s upscale malls, cryptocurrency has been active in lower-income neighborhoods for years. In Kibera’s Soweto West area, residents have used Bitcoin since 2022 through a program run by fintech startup Afrobit Africa.
The program pays garbage collectors small amounts of Bitcoin after community cleanup sessions. Many participants lack traditional bank accounts or official identification documents. About 200 people in the area now use Bitcoin, with some merchants and motorcycle taxi drivers accepting payments through the Lightning network. Afrobit Africa estimates it has distributed around $10,000 through the program.
Damiano Magak, a 23-year-old garbage collector and food seller, often prefers Bitcoin payments over Kenya’s mobile money system M-PESA. He cites lower fees and fewer delays as key advantages.
The contrast shows Bitcoin’s broad appeal in Kenya. The cryptocurrency serves both as digital gold for formal economy participants and as a banking alternative for people without access to traditional financial services.
Kenya Emerges as Regional Crypto Leader
Kenya ranks among the top five countries globally for peer-to-peer Bitcoin transactions, according to the 2024 Chainalysis Global Crypto Adoption Index. The country has become one of Africa’s three largest crypto markets by trading volume.
This growth happens alongside Kenya’s efforts to meet international financial standards. The country remains under scrutiny from the Financial Action Task Force and faces pressure to modernize its financial oversight systems.
Industry observers see the VASP law as positioning Kenya to become a regulated crypto hub for East Africa. The legislation follows similar frameworks established by Nigeria, South Africa, and other regional leaders.
Chebet Kipingor from Busha Kenya, a crypto exchange subsidiary, called the law’s passage historic. She noted that Kenya is positioning itself as a leader in balancing innovation with consumer protection in the digital finance space.
Enforcement Questions Remain
The appearance of unlicensed Bitcoin ATMs highlights key challenges in implementing new crypto regulations. Authorities must balance encouraging innovation with ensuring proper oversight and consumer protection.
The National Treasury is working on detailed regulations that will enable the licensing process. These rules will cover capital requirements, custody standards, and disclosure obligations for crypto companies. Officials haven’t announced when these regulations will be ready.
Companies operating without licenses face significant penalties under the new law. Individuals can be fined up to 10 million Kenyan shillings ($65,000), while companies face fines up to 20 million shillings ($130,000) or executive imprisonment.
The current situation creates uncertainty for both crypto businesses and consumers. Companies don’t know when they can apply for licenses, while users of services like the new Bitcoin ATMs operate in a regulatory gray area.
Digital Crossroads
Kenya stands at a crucial moment in its crypto evolution. The country has moved from an informal crypto economy to implementing comprehensive regulations, but the transition creates temporary uncertainty.
The Bitcoin ATMs in Nairobi’s malls represent more than new technology – they symbolize Kenya’s transformation from crypto experimentation to formal digital finance. Whether this transition succeeds depends on how quickly and effectively authorities can bridge the gap between law and implementation.