Kenya’s new Virtual Asset Service Provider regulations officially came into effect on 4 November 2025. However, the Central Bank of Kenya and the Capital Markets Authority later issued a joint clarification on 18 November 2025 indicating that no VASP has been licensed yet. The regulators confirmed that licensing will only start once the Treasury issues the regulations required to operationalize the Act. Until then, services such as exchanges, wallet providers, and stablecoin platforms will remain unlicensed and not authorized to operate.

This regulatory gap has not prevented market activity, Bitcoin ATMs appeared across major Nairobi shopping malls, just days after the new VASP Act commenced. Their installation highlights growing consumer demand despite the absence of formal licensing infrastructure.

In a parallel shift, South Africa’s central bank (SARB) governor cautioned that USD-backed stablecoins are being used to undermine African currencies and risk eroding monetary sovereignty. In its latest Financial Stability Review published this November, SARB classifies crypto assets and stablecoins as emerging risks, noting their borderless nature and the potential to undermine existing exchange-control rules.

At the same time, SARB’s new Paper on Retail CBDC concludes that, although a digital rand is technically feasible, there is no immediate policy case to issue a retail CBDC. Taken together, the stance tightens scrutiny on private digital assets while keeping state-backed digital money under cautious consideration.

This calibration by two of the continent’s most active crypto markets suggests regulators are beginning to reassess that Africa could sleepwalk into a digital monetary system without ever debating the consequences. We must hereby, shape our own monetary architecture. Bitcoin’s neutrality, detached from foreign currency blocs, offers a foundation for sovereignty rather than dependency.

Policy Implication:

These developments reveal distinct regulatory challenges. Kenya faces an implementation delay with its new VASP Act where legislation exists but administrative capacity lags, allowing market activity to continue in the gray zone. South Africa, which already classified crypto as financial product alongside accompanying legislation in place, has identified clear risk concerns but chosen to strengthen administrative oversight over structural alternatives such as CBDC. 

Both responses address digital assets systems where infrastructure and denominations frequently originate beyond national borders. This creates an opportunity to examine whether Bitcoin’s protocol-level neutrality, which is independent of any currency or sovereign issuer, might present an alternative framework. Rather than replicating dependency on foreign-denominated stablecoins or waiting for state-issued digital currencies, African policymakers might consider how politically neutral, open-source monetary infrastructure could serve the continent’s sovereign objectives. 

The regulatory choices made today will determine whether Africa’s digital financial infrastructure reflects deliberate continental priorities or defaults to offshore-designed systems.