The Rules Are Here. Now Kenya Gets to Build

Kenya’s VASP regulations are far from perfect. But they are here. And that changes the conversation.

For years, much of Kenya’s virtual asset conversation has centred on what regulation might look like. Now businesses have a framework to work with. They can start figuring out what compliance looks like, where the opportunities are, and what it will actually take to operate in the market.

That was one of the main ideas running through TechRift Africa’s “Opportunities at the Intersect of AI, Web3 & Policy,” held on Saturday, August 15, at ALN Kenya | Anjarwalla & Khanna in Nairobi.

Organised with Bitroot, ALN Kenya and Caroline Oduor & Associates, the event brought together people working across technology, law, policy and digital assets. It also marked the physical conclusion of TechRift’s five-part webinar series, which has explored virtual assets, emerging technologies and regulation since June.

Across the discussions, one thing became clear: Kenya is moving from talking about what these technologies could become to figuring out how they actually work in the real world.

AI compute is becoming a question of control

The first conversation of the day was about what sits underneath the AI boom: compute.

In his keynote, Jerry Yu looked at how access to data, computing power and models is shaping who gets to build with AI. As more AI applications demand significant computing resources, access to that infrastructure is becoming a bigger part of the equation.

That is the problem Bitroot is trying to address. Its decentralised AI initiative explores how computing power can be contributed and shared across communities instead of being concentrated in a small number of infrastructure providers. The idea is to make compute more accessible while giving communities a role in the infrastructure they rely on.

That made the connection with Web3 fairly natural. Decentralisation has always been partly about who gets to participate and who gets to control the underlying infrastructure.

The question for AI is starting to look similar. As demand for compute grows, access to it could become one of the biggest constraints on who gets to build.

Bitroot is betting that more distributed infrastructure can help change that.

Kenya’s VASP framework changes the conversation

That question of control took a different form when the discussion moved closer to home. Kenya now has a regulatory framework for virtual assets. The question is what businesses do with it.

On the “Regulatory Development in Kenya and Opportunities” panel, Mungai Njenga, Senior Associate at ALN Kenya; Chebet Kipingor, Business Operations Manager at Busha; and Bill Okello, lawyer and digital assets professional, discussed what operating in that environment will actually require. Maryanne Njuguna moderated the conversation.

One point came through clearly: getting a licence is only the beginning.

Chebet put it simply:

> “Licences will get you into the market, but operational discipline is what keeps you there.”

Businesses will have to build the systems behind that licence. KYC and KYB processes, compliance tooling and security will become part of the day-to-day work of running a virtual asset business.

That also creates opportunities for companies building the infrastructure that helps regulated businesses operate.

The panel returned to Kenya’s experience with M-Pesa. Mungai Njenga pointed to the way regulation and innovation have evolved alongside each other, even when technology has moved faster than the rules around it.

That gap is still relevant.

> “Innovation and regulation has had a disconnect, but it takes innovators in the space to explain to regulators how policy affects the industry.”

As the VASP framework moves from paper into implementation, that communication will matter. Regulators will be learning from the businesses they regulate, while those businesses will have to learn how to build within the rules.

The legal opportunity goes beyond licensing

The new rules also open up a lot of work for lawyers. Licensing is the obvious place to start. But once businesses are operating, they will need help with compliance, legal structures, contracts and disputes.

They will also need lawyers who understand the technology well enough to advise them properly. A virtual asset business still has to deal with Kenya’s existing rules around anti-money laundering, data protection, taxation and financial services.

There are not many lawyers in Kenya who understand both sides of that equation yet. That is the opportunity.

Kenya has an advantage. Trust still has to be earned.

Kenya has something working in its favour; millions of people already use digital financial services every day. M-Pesa has made digital transactions familiar to a huge part of the population, which gives new financial technologies a foundation that many markets have had to build from scratch.

But familiarity does not automatically create trust. New platforms will still have to prove that they can protect users, keep their systems secure and operate reliably within the regulatory framework.

That makes execution important.

The companies that last will have to treat compliance and security as part of the product, not something added after launch.

As regulation determines who can enter the market, how businesses operate will determine who remains in it.

What happens next matters more than what was discussed

AI compute, virtual assets and digital policy can look like separate conversations. At the event, they kept converging around practical questions about infrastructure, digital assets and the institutions that govern them.

None of those questions has been settled. The VASP framework still has to survive implementation. Decentralised AI models still have to prove they can work at scale. Businesses still have to earn the trust of users and regulators.

But that is what makes this moment interesting. Kenya has moved past the question of whether these technologies are coming. They are already here.

Now comes the harder part: building around them.