Kenyan lawmakers have passed a new bill to regulate digital assets such as cryptocurrencies, aiming to attract more investment into the rapidly growing sector by establishing clear legal guidelines.

The Virtual Asset Service Providers Bill, approved by Parliament last week, seeks to bring oversight and transparency to the digital asset market, according to Kuria Kimani, chairperson of the National Assembly’s Finance Committee.

Kimani said the legislation addresses long-standing concerns about the lack of a regulatory framework governing cryptocurrencies and related activities in Kenya. Once signed by President William Ruto, the law will make Kenya one of only a few African countries—alongside South Africa—to formally regulate the crypto industry.

Under the new framework, the Central Bank of Kenya (CBK) will be responsible for licensing the issuance of stablecoins and other virtual assets, while the Capital Markets Authority (CMA) will oversee licensing for crypto exchanges and trading platforms.

The bill comes amid global discussions on the potential impact of U.S. dollar-backed stablecoins, which some regulators fear could weaken local currencies in developing economies.

Kimani said the law is expected to attract significant investment into Kenya’s financial technology sector, including interest from major global exchanges such as Binance and Coinbase, which have previously held talks with the government.

“We are hoping that Kenya can now be the gateway into Africa,” Kimani said. “Most young people between 18 and 35 years of age are already using virtual assets for trading, making payments, and investing.”

The digital asset industry has seen explosive growth globally over the past decade, though many governments have struggled to balance innovation with the need to prevent misuse for criminal activities.

Kimani added that Kenya’s new law draws on best practices from established markets like the United States and United Kingdom, ensuring robust consumer protection and regulatory oversight.

Kenya is already recognized as a leader in digital finance thanks to its pioneering M-Pesa platform, operated by Safaricom, which revolutionized mobile money transfers and financial inclusion for millions across the country.