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The future of Africa's digital asset market is no longer speculative. It is real, growing, and increasingly regulated. For founders, Fintechs, and even traditional financial institutions looking to operate in the digital currency space, obtaining a Virtual Asset Service Provider (VASP) license is the price of market entry. In jurisdictions like Nigeria and Kenya—two of the continent's most active crypto markets—regulators are moving to formalize the ecosystem, protect consumers, and bring operators within a defined legal framework.
However, while both countries are moving in the same direction, their regulatory approaches, licensing processes, and compliance expectations differ in important ways. Understanding these nuances is critical for any business looking to establish or expand operations across either market.
In this newsletter, we examine the licensing requirements, regulated activities, applicable regulatory authorities and other practical considerations for navigating the process successfully.
| S/N | SUBJECT | NIGERIA | KENYA |
| 1 | Principal Regulator | Securities and Exchange Commission | Capital Markets Authority |
| 2 | License Categories | · Ancillary Assets Service Providers (AVASPs)
· Digital Assets Offering Platform (DAOP) · Digital Assets Intermediary (DAI) · Digital Assets Platform Operator · Real-world Assets Tokenization and Offering Platform · Digital Assets Exchange (DAX) · Digital Assets Custodian |
· Virtual Asset Wallet Provider
· Virtual Asset Exchange · Virtual Asset Payment Processor · Virtual Asset Broker · Virtual Assets Investment Advisor · Virtual Asset Manager · Virtual Asset Offering Provider (Initial Coin Offering) · Virtual Asset Offering Provider (Virtual Asset Tokenization) · Virtual Asset Offering Provider (Token Issuance) · Virtual Asset Offering Provider (Stablecoin Issuance) |
| 3 | Permissible Activities | Digital Assets Offering Platform This license is used to facilitate fund raising through a digital asset offering via the use of a distributed ledger technology. | |
| Digital Assets Intermediary
This license is used to facilitate transactions involving virtual assets such as: a. execution of orders for virtual assets on behalf of clients; b. acceptance and transmission of orders for virtual assets on behalf of clients; c. placing of virtual assets; d. providing advice on virtual assets investment; e. providing financial portfolio. |
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| Digital Assets Custodian
This license is suitable for facilitating the safekeeping/holding in custody and/or administration of virtual assets or instruments that enable control over virtual assets. |
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| Digital Assets Exchange
This license is used to facilitate the trading of virtual or digital assets. |
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| The creation of new license categories such as
· Ancillary Virtual Asset Service Providers (AVASPs) · Digital Assets Platform Operators (DAPOs); and · Real‑World Assets Tokenization and Offering Platforms (RATOPs). highlights an area where further regulatory clarity will be required. As there is no existing regulatory framework that expressly identifies the permissible activities that fall within these newly introduced license categories. |
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| 4 | Share Capital Requirements | Ancillary Assets Service Providers (N300 million)
Digital Assets Offering Platform (N 1billion) Digital Assets Intermediary (N500 million) Digital Assets Platform Operator (N500 million) Real-world Assets Tokenization and Offering Platform (N 1 billion) Digital Assets Exchange (N 2 billion) Digital Assets Custodian (N2 billion) |
Virtual Asset Wallet Provider
(KSH 150 million) Virtual Asset Exchange (KSH 150 million) Virtual Asset Payment Processor (KSH 50 million) Virtual Asset Broker (KSH 30 million) Virtual Assets Investment Advisor (KSH 2.5 million) Virtual Asset Manager (KSH 30 million) Virtual Asset Offering Provider (Initial Coin Offering) (KSH 200 million) Virtual Asset Offering Provider (Virtual Asset Tokenization) (KSH 200 million) Virtual Asset Offering Provider (Token Issuance) (KSH 200 million) Virtual Asset Offering Provider (Stablecoin Issuance) (KSH 500 million) |
| 5 | Corporate
Governance Requirements |
All VASPs must have a minimum of five (5) directors, three (3) of whom must be Nigerian.
Also, the board of each VASP must comprise of the following committees · Nomination and Governance · Remuneration · Audit and Risk Management |
This is largely determined by the shareholding structure of the company. However, in practice it is typically a minimum of three (3) directors. |
| 6 | Investment Thresholds | High Networth Individuals
(No restriction) Angel Investors (maximum of N50 million per issuer within a 12-month period) Retail Investors (maximum of N1million per issuer not exceeding N10 million within a 12-month period) |
Conclusion
Securing a Virtual Asset Service Provider (VASP) license in Nigeria or Kenya is no longer simply a regulatory requirement but a strategic step toward building a credible and sustainable digital asset business. While both jurisdictions are actively developing their frameworks, they each present distinct requirements and regulatory expectations that must be carefully navigated. Businesses looking to operate in either market must take a proactive approach to compliance, ensuring that their structures, governance, and operational models align with the applicable rules from the outset.
Ultimately, success in this space will depend not only on obtaining a VASP license, but on maintaining ongoing compliance in an evolving regulatory environment. As regulators continue to refine their approach to Virtual assets, businesses that prioritize transparency, strong internal controls, and regulatory engagement will be best positioned to scale confidently. For prospective entrants, understanding the regulatory landscape early and preparing accordingly will make the difference between smooth market entry or costly delays.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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