CBK Survey Shows 31% of Kenyan Banks Plan to Deploy Digital Assets, as Government Reduces Crypto Tax from 3% to 1.5%.
Nearly one-third of banks in Kenya are preparing to engage in cryptocurrency transactions, according to the latest survey by the Central Bank of Kenya (CBK). This move occurs as the government actively legalizes and regulates the crypto market to combat increasing illegal activities.
The CBK Innovation Report indicates that 31% of survey participants confirmed they are highly likely to deploy activities related to virtual assets. Commercial banks and microfinance institutions believe digital assets could expand financial access for unbanked populations.
The survey results show a clear shift in banks' perspectives on virtual assets, as digital asset usage increases in sectors like finance, entertainment, real estate, and art. These banks plan to participate in activities related to Bitcoin, Ethereum, Non-Fungible Token, and other digital tokens.
According to the United Nations Conference on Trade and Development (UNCTAD) report, the Kenyan government highly values the potential of the crypto market with approximately 4 million domestic cryptocurrency users. This number reflects the growing blockchain technology acceptance in Kenya.
New Legal Framework and Tax Incentives
Most financial institutions (35%) emphasize the urgent need for a legal framework regulating digital innovation. To meet this demand, the Kenyan government has undertaken legal adjustments through the 2025 Virtual Asset Service Provider Bill, requiring crypto companies to establish local representative offices and appoint directors.
In an effort to encourage crypto usage, the National Treasury proposes reducing digital asset transaction tax from 3% to 1.5% in the 2025 Finance Bill Draft. This move follows strong opposition from domestic crypto companies who called the previous 3% rate a "controversial digital asset tax".
— TawkCrypto (@Tawkcrypto) June 2, 2025
Crypto Tax Showdown in Kenya
@PwC has officially joined forces with top Kenyan crypto firms, including Busha, Kotani Pay, Luno & Swypt, to fight the controversial Digital Asset Tax (DAT).
From 3% to 1.5%, but the industry says it's still unfair.
According to Cabinet Minister John Mbadi, the tax reduction aims to align crypto tax with the 1.5% revenue tax applied to businesses with annual revenues between 1 and 25 million Ksh. The Kenya Revenue Authority (KRA) is also developing a new tax system with real-time transaction tracking capabilities to prevent tax evasion and illegal activities.
The Nairobi Stock Exchange (NSE) has partnered with DeFi Technologies to launch Kenya Digital Exchange (KDX), a digital platform for trading intangible assets including stocks, bonds, ETFs, and tangible commodities like gold and oil on the blockchain system.
Kenya was previously placed on the Financial Action Task Force (FATF) gray list since 2014 due to insufficient crypto activity regulations. However, recent progress in establishing legal frameworks and investment encouragement demonstrates this East African nation's positive transformation towards becoming a regional digital financial center.
