Kenya's Virtual Asset Law and Tokenization: What the New Rules Mean

For years, crypto and digital assets in Kenya lived in a grey area. People traded, platforms operated, scams flourished, and regulators warned the public but had no full legal framework to work with. That changed with the Virtual Asset Service Providers Act, 2025, and the regulations that followed in 2026.

This post explains, in plain words, what the law covers, who regulates what, how tokenization of real-world assets such as property is treated, and what it means for ordinary investors and land buyers.

This is general information, not legal advice. Laws and regulations change, and the details matter. Read the official texts and speak to an advocate before acting.

The law in brief

The Virtual Asset Service Providers Act, 2025 came into force in November 2025. It does three main things:

1. Defines virtual assets and virtual asset services, such as exchanges, wallets, brokers, token issuers and tokenization platforms.
2. Requires anyone providing those services in or from Kenya to be licensed.
3. Splits supervision between regulators, so that each activity is overseen by the body best suited to it.

Regulations to put the Act into practice were gazetted in 2026, setting out licence categories, capital requirements, conduct rules and approval processes. Businesses that were already operating when the Act started were given a transition period to comply.

Who regulates what

Regulator	Main role under the framework
Capital Markets Authority (CMA)	Investment-type activities, including token offers that give investors returns, and tokenization of real-world assets
Central Bank of Kenya (CBK)	Payment-type activities, such as stablecoins and virtual asset payment services
Other agencies	Anti-money-laundering oversight, tax, and consumer protection under their own laws

For anything involving property tokens, the Capital Markets Authority is the key regulator.

Tokenization of real-world assets

The 2026 regulations list tokenization of real-world assets as a licensed activity. In simple terms:

• The platform needs a licence. A business that wants to tokenize assets must be licensed, meet capital requirements and follow conduct rules.
• Each offer needs approval. A licence is not enough. Each tokenized offer, for example tokens in a specific building, needs separate approval from the CMA, with fees linked to the size of the offer.
• The asset must be checked. Applicants are expected to provide things like an independent valuation, custody arrangements and proof that the asset is free of loans and disputes.
• Investors must be verified. Identity and anti-money-laundering checks apply.

Law firm summaries of the regulations give figures for minimum capital and offer fees. Check the gazetted regulations or ask an advocate for the current numbers before relying on any figure.

The CMA sandbox

Before the full regulations, the CMA was already testing tokenization in its regulatory sandbox, which lets firms try new products with real customers under close supervision. In 2026 it admitted platforms focused on fractional real estate investing through tokens. These projects will shape how the CMA approaches property tokens in practice.

What the law does not change

It is important to be clear about what the new framework does not do:

• It does not change land law. The land register under the Land Registration Act is still the legal record of who owns land. A token does not replace a title deed.
• It does not remove Land Control Board consent for dealings in agricultural land. See our Land Control Board guide.
• It does not change rules on foreign ownership. Non-citizens are still limited to leasehold land.
• It does not make every token safe. A licensed platform can still offer an investment that loses money.

So a tokenized property offer in Kenya will usually be structured as tokens in a company or trust that holds the property title, not as tokens that are the title. Our post on tokenizing land and real estate explains these structures.

How a tokenized estate could work under the rules

To make this concrete, here is how a tokenized offer of a land project might be put together in Kenya under the new framework. It is a simplified picture, not legal advice, and real offers will differ.

1. The land is bought and titled normally. A company or trust buys the land, the transfer goes through the land registry, and the title is issued in the company's or trust's name. Land Control Board consent is obtained where the land is agricultural.
2. The asset is checked. An independent valuer values the land, the title is searched, and the company confirms there are no charges, cautions or disputes against it.
3. A licensed platform prepares the offer. The platform, licensed under the new rules, structures the tokens. Each token usually represents a share in the company or a unit in the trust, which in turn owns the land.
4. The regulator approves the offer. The specific offer, with its documents, risks and fees, is approved before any token is sold.
5. Investors are verified. Each investor goes through identity and anti-money-laundering checks before they can buy.
6. Tokens are issued and recorded. Investors hold their tokens in digital wallets, and the platform keeps the register of who holds what, matched to the company's or trust's own records.
7. Life of the investment. Rental income, sale proceeds or development profits are paid to token holders according to the offer terms, and tokens may be transferred on approved venues.

At every step, the land itself stays under Kenyan land law. What changes is how the ownership of the company or trust that holds it is recorded and traded.

Why this matters

For investors

The framework gives you something to check. Before you put money into any digital asset product in Kenya, you can ask: is this firm licensed, and is this offer approved? A "no" is a clear warning.

For honest businesses

Clear rules let serious firms build products, raise capital and work with banks, instead of operating in a grey zone alongside scammers.

For the land market

Over time, regulated tokenization could open new ways to invest in Kenyan property with smaller amounts, bring in diaspora and foreign capital through transparent structures, and push the market towards better digital records.

For Kenya's position

Kenya is one of the first African countries with a dedicated virtual asset law covering tokenization. Combined with M-Pesa, Ardhisasa and an active capital markets regulator, that puts it in a strong position to attract investment in this space.

How to protect yourself

1. Check the licence. Look up the firm on the regulator's published lists. Do not rely on a logo on their website.
2. Check the offer approval. Ask for the CMA approval for the specific offer.
3. Understand the asset. For property, ask for the title number, an official search and the valuation.
4. Understand your rights. What does the token legally give you? Ownership of a company? A share of rent? Nothing?
5. Know how to exit. Can you sell your tokens? Where, to whom, and is there a market?
6. Avoid guarantees. No legitimate investment guarantees high returns.
7. Keep records. Agreements, receipts, wallet addresses and correspondence.

Our guide to land buying scams in Kenya covers many of the same warning signs.

Tax

Kenya also taxes digital assets. Over recent years the government has introduced and changed taxes on digital asset transactions and the income from them, and capital gains tax rules can apply when assets are sold at a profit. Tax treatment is changing quickly, so ask a tax adviser before you invest. Our post on capital gains tax on land sales covers the land side.

Frequently asked questions

What is the Virtual Asset Service Providers Act?

Kenya's 2025 law that sets up licensing and supervision for businesses dealing in virtual assets, such as exchanges, wallets, token issuers and tokenization platforms.

Who regulates tokenized property in Kenya?

The Capital Markets Authority, for investment-type offers such as tokens that give a share of a property or its income.

Is it legal to tokenize real estate in Kenya?

Tokenization of real-world assets is a licensed activity under the 2026 regulations. Each offer needs CMA approval.

Does a property token replace a title deed?

No. The land register is still the legal record of ownership. Tokens usually represent shares in a company or trust that holds the title.

What does this mean for people buying plots today?

Very little changes. If you buy a plot from a land company like Famyard, you get a sale agreement and a title deed in your own name, as before. Tokenized offers are a separate kind of investment, and they come through licensed platforms with their own documents.

Can a land company tokenize its own estates?

Only through a licensed platform and with each offer approved. A land company can still prepare for it, by keeping clean digital records of every plot, accurate survey plans and well-organised sale documents. That groundwork is what any tokenized offer would be built on.

How do I check if a platform is licensed?

Check the regulator's published lists of licensed firms and approved offers, and ask the firm for its licence and offer approval.

Keep reading

Read our plain guide to RWA tokenization and RWA trends in 2026. If you are buying land today, browse plots for sale in Nyeri or call Famyard Enterprises on +254 119 222666.