Converting Crypto to Foreign Currency in Kenya: The CBK Authorisation Under Regulation 14

Most of the commentary on Kenya’s new crypto licensing regime concentrates on the VASP licence itself. Regulation 14 of the Virtual Asset Service Providers Regulations, 2026 (Legal Notice 134 of 2026) creates a separate hurdle that is easy to miss: anyone who wants to carry on the conversion of virtual assets to or from foreign currency must first apply to the Central Bank of Kenya for authorisation. This article sets out what regulation 14 says, what the neighbouring regulations add, and the questions it leaves open.

What regulation 14 says about the conversion of virtual assets

The regulation is short. Its six subregulations provide that:

1. A person seeking to transact the business of conversion of virtual assets to or from foreign currency must, before commencing that business, apply to the Central Bank of Kenya for authorisation.
2. The application must be in writing.
3. In considering it, the Central Bank takes into account the financial condition and history of the applicant.
4. Within ten days of making its determination, the Central Bank must notify the applicant of its decision.
5. An authorisation is valid from the date it is issued and, unless revoked earlier, expires on 31 December of the year it is issued.
6. A person who undertakes conversion business without the authorisation is liable to the administrative sanction in regulation 142.

A separate approval, and an undefined term

Regulation 14 is not tied to any licence category. It applies to “a person seeking to transact the business of conversion”, and the Regulations do not define “conversion”. We read it as a requirement that sits alongside the VASP licence for a business that swaps virtual assets for shillings or another currency, and not as something a licence replaces. The text does not say so expressly, so that reading should be confirmed with the Central Bank in any real application.

The businesses most likely to need to ask the question are those that run on-ramps and off-ramps, pay out stablecoin receipts in shillings, operate over-the-counter desks, or settle remittances through virtual assets. Whether a particular model is “conversion business” is a matter of facts and of how the Central Bank reads the term. The Regulations also say nothing about how regulation 14 relates to the separate forex bureau regime, which we cover in our guide to forex bureau licensing, or to the wider rules in our overview of foreign exchange regulation in Kenya.

The annual cycle: expiry, renewal and revocation

Authorisations are short-lived. Regulation 15 allows renewal on an annual basis, with the application lodged at least two months before expiry and determined in accordance with regulation 14. Because every authorisation expires on 31 December, the renewal application is due by the end of October each year.

That produces a timing wrinkle for the first cycle. An authorisation issued in November or December 2026 would expire within weeks of being granted, and the two-month renewal window would already have passed. Regulations 14(5) and 15(2) do not say how the Central Bank will treat authorisations granted late in a calendar year, so applicants should ask before they file.

Regulation 16 lets the Central Bank revoke or suspend an authorisation if the holder ceases to carry on business in Kenya or is wound up, fails to comply with the Regulations or a condition of the authorisation, or conducts business in a manner that poses a risk to the stability of the financial system. Before doing so it must give at least fourteen days’ notice and consider written representations.

What happens if you convert without authorisation

Regulation 142(1) lists regulation 14(6) among the contraventions that attract an administrative fine of up to KES 3 million for an individual or KES 5 million for a company. Under regulation 142(2) the regulator may in addition suspend or revoke a licence, approval or authorisation issued under the Regulations, or direct the person to take remedial action. An operator that holds a VASP licence but converts without a regulation 14 authorisation therefore risks its licence as well as a fine.

Fees are a further gap. The First Schedule tables we read set out licence, renewal, approval and other fees, but we did not find a fee for the regulation 14 authorisation. Confirm the position with the Central Bank before budgeting.

Practical steps for applicants

1. Map every flow in which your platform exchanges virtual assets for fiat currency, whether for customers or for your own account.
2. Decide which VASP licence category fits the business, and treat regulation 14 as a second, parallel application. Our guide to the VASP application process covers the licence side.
3. Assemble evidence of financial condition and history, which regulation 14(3) makes the express test.
4. Diarise 31 December for expiry and the end of October for renewal.
5. Do not begin conversion until the authorisation is in hand. Existing operators should read our note on the 4 November 2026 transition deadline, and all operators should read our guide to AML and Travel Rule compliance.