Kenya’s financial landscape is witnessing a transformation as digital currencies offer innovative alternatives to traditional banking. Amidst a weakening national currency and rising inflation rates, Kenyans are turning their gaze to the burgeoning world of virtual assets. This pivotal moment for the country is not just about adopting new technology—it’s about reshaping how Kenyans save, invest, and engage with the global economy.


As the Kenyan Shilling struggles and inflation soars, citizens are in pursuit of financial stability, leading many to embrace cryptocurrencies. Over 6 million Kenyans now own cryptocurrencies, using them as a hedge against inflation, a means for international trade, and a safeguard for their savings.

In an article by Freeman Law;

Kenya holds more than $1.5 billion worth of Bitcoin alone, equating to 2.3% of Kenya’s GDP. Substantially, this figure does not include other cryptocurrencies, such as Ethereum or Dogecoin. These statistics indicate that cryptocurrency is accepted by Kenyan society despite the CBK’s warnings.

Additionally, and according to Chainalysys, Kenya’s ranks 5th globally in terms of P2P exchange trade volume ranking and 21st on the Global Crypto Adoption Index. This underscores its potential to become a regional blockchain powerhouse, offering a beacon of hope for financial freedom.

It is therefore apparent that despite the lack of regulations, virtual assets have surged in popularity as Kenyans seek refuge from economic volatility. These digital representations of value are more than just currency; they’re tools for investment and global money transfers, reshaping how Kenyans interact with the world’s financial systems.

We therefore can’t help but ponder, does ignoring and condemning the use of virtual assets create a safe and regulated environment for Kenyan investors in the virtual asset eco-system? Perhaps not.

Trading of virtual assets in Kenya operates on peer-to-peer model. The concept of Peer-to-Peer (P2P) trading is revolutionizing money exchange in Kenya. By enabling direct transactions between individuals in local currency, P2P platforms are democratizing access to the global marketplace and presenting a versatile solution for converting between cryptocurrencies and Kenyan Shillings.

This method not only bypasses traditional financial institutions but also empowers Kenyans to maintain control over their financial transactions.


The burgeoning interest in virtual assets doesn’t come without its pitfalls. Kenyans face the dual challenge of cryptocurrency scams and the perils of an unregulated market, exemplified by the FTX Collapse of 2022. As the nation grapples with these risks, the need for robust financial literacy and prudent investment strategies has never been more critical.

Cryptocurrency we dare say is stuck in purgatory. While it is not illegal to deal with cryptocurrency in Kenya, the Central Bank of Kenya issued a cautionary notice to the public in 2015 stating that the public should desist from transacting in cryptocurrency. Similarly, through Circular No. 14 of 2015, the Central Bank of Kenya issued a directive which expressly advised financial institutions, not to open accounts for any person dealing with virtual currency. It specifically stated that failure to adhere to this directive would lead to remedial action for the financial institution.

A contrarian position to the CBK circulars was seen in the Finance Act 2023. The Act introduces a 3% tax on income earned from the transfer or exchange of digital assets. The owner of the platform or the person facilitating the transfer or exchange of a digital asset is expected to withhold the digital asset tax and remit it to the Commissioner within five working days after the withholding.

As Kenya Revenue Authority begins taxing crypto trades, the cry for clear regulations grows louder, underscoring the urgency for legislative clarity.


Kenya is not alone in its struggle to find the right regulatory approach to cryptocurrencies. Nations worldwide are experimenting with different degrees of regulatory control, with varying degrees of success. These international experiences offer valuable lessons for Kenya as it seeks to chart its own course in the crypto world.

The road ahead for Kenya in the cryptocurrency domain is fraught with challenges but also ripe with potential. As the nation contemplates its next move, it must balance the need for innovation with the demand for stability. With the world watching, Kenya’s journey through the complex terrain of digital finance continues to unfold, promising to redefine the economic prospects and financial democratization for its people.

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