Kenya’s New Crypto Law Faces Major Test as Bitcoin ATMs Appear in Nairobi Malls

Kenya’s ambitious push to regulate cryptocurrencies is now facing its first real-world stress test. Just weeks after Parliament passed the Virtual Asset Service Providers Act (VASP) in October 2025 and it took effect on November 4, multiple Bitcoin ATMs have been spotted in major malls across Nairobi even though no crypto firms are yet licensed to operate under the new law.

The appearances of these ATMs branded “Bankless Bitcoin” and positioned alongside traditional banking kiosks signal a surge in retail crypto access. They also underscore the enforcement gap Kenya’s regulators face as the industry moves faster than regulation can catch up.

What the law covers and what’s still in limbo

On October 13, Kenya’s Parliament approved the VASP bill, giving regulators a legal framework to license and supervise crypto exchanges, wallet providers, token issuers and custodians. The bill assigns the Central Bank of Kenya (CBK) responsibility for payments and custody functions, while the Capital Markets Authority (CMA) will oversee trading and investment.

But regulatory implementation has lagged. As of mid-November, both CBK and CMA confirmed that no Virtual Asset Service Providers (VASPs) had been issued licenses under the VASP Act. Licensing remains on hold pending the release of draft regulations by the National Treasury and until those regulations are published, firms cannot legally register.

Why the appearance of Bitcoin ATMs matters

1. Practical access meets regulatory uncertainty

The ATM installations in malls highlight the rapid growth of crypto access in Kenya. Though the country already uses mobile-money platforms like M-Pesa widely, these machines bring physical, in-person crypto entry points. However, with no firm yet licensed, there’s legal ambiguity.

2. Regulators on notice

The public installation of crypto ATMs creates pressure on regulators. The CBK and CMA have warned firms that claiming authorization without a license is illegal. The timing suggests authorities must act quickly to close enforcement gaps or risk regulatory credibility.

3. Symbolic of broader shift in fintech adoption

Kenya is already a recognized leader in mobile-finance innovation. The VASP Act was seen as a move to formalize crypto use among youth and informal sectors. The ATM rollout reflects actual demand especially among younger users seeking alternative payment or savings tools.

What could go wrong (and what to watch)

Unlicensed operations: Until regulations are gazetted, any ATM operator may be in violation, exposing users and operators to legal risk.
Consumer protection gaps: With rapid rollout, there’s a risk of scams, fraud or insufficient disclosure to inexperienced users.
Regulatory enforcement test: Will CBK and CMA act swiftly against unauthorized providers, or will enforcement lag behind rollout?
Market confidence and innovation: If regulations mismanage or over-regulate the sector, Kenya risks losing fintech momentum or allowing informal markets to dominate again.

What to monitor going forward

Publication of draft regulations by the National Treasury to operationalize the VASP Act.
Licenses granted to exchanges, wallets or ATM providers signalling legal compliance.
Growth in ATM installations across other regions beyond Nairobi malls.
Statements by CBK or CMA about compliance actions or enforcement against unauthorized services.
Consumer adoption rates and user experiences at these new ATM locations.

FAQs

Q1: What is Kenya’s new crypto law?
Kenya passed the Virtual Asset Service Providers (VASP) Act in October 2025. The law grants regulatory oversight over crypto exchanges, wallet providers, token issuers and custodians. The Central Bank of Kenya handles payments and custody, while the Capital Markets Authority handles trading and investment.

Q2: Are crypto firms licensed in Kenya yet?
Not yet. While the VASP Act took effect on November 4, 2025, licensing cannot begin until draft regulations are published by the National Treasury. The CBK and CMA have publicly stated that no VASPs are currently licensed under the Act.

Q3: What happened with the Bitcoin ATMs in Nairobi?
Several malls in Nairobi have installed Bitcoin ATMs branded “Bankless Bitcoin,” offering cash-to-crypto services. These appeared despite the fact that under the new law no provider has been licensed yet creating a regulatory gap.

Q4: Is it legal to use a crypto ATM in Kenya now?
It is legally ambiguous. The law is in effect, but the licensing framework is not yet operational. Using an ATM operated by an unlicensed service provider may carry risk. Regulators have warned consumers and operators about proceeding without authorization.

Q5: Why is Kenya pushing this regulation now?
Kenya aims to formalize a rapidly growing crypto ecosystem, protect consumers, align with international standards and position itself as a fintech hub in Africa. Over six million Kenyans (about 10% of the population) already use virtual assets.