Real-World Asset Tokenisation & VASP Licensing in Kenya

The VASP Act recognises tokenisation and token issuance platforms as distinct licensed activities, generally sitting with the Capital Markets Authority given their market and investment character. This is a natural companion to the legal structuring questions we set out in Real-World Asset Tokenisation in Kenya: Legal Questions Founders Should Resolve: licensing answers who may operate a tokenisation platform, while structuring answers what the token actually represents.

Three roles, not one

A tokenisation arrangement typically involves at least three distinct legal roles that should not be conflated: the owner of the underlying asset (property, a private credit book, a fund interest), the issuer of the token representing rights in that asset, and the platform on which the token is offered or traded. Each role carries different obligations, and a single company performing more than one role should map each separately against the VASP licence categories.

Licence categories relevant to tokenisation

• Virtual Asset Offering Provider – Tokenisation. Covers platforms that structure and offer tokenised interests in real-world assets.
• Token Issuance Platform. Covers platforms that provide the technical and operational infrastructure for issuing tokens, which may be a distinct role from the party structuring the underlying offering.

The token is not a substitute for title

Tokenising an asset does not, by itself, create or transfer legal title to that asset. A token representing a share in a parcel of land, for example, is only as enforceable as the underlying legal instrument, a trust, an SPV shareholding, a contractual right, that actually connects the token holder to the asset. Platforms should ensure this underlying instrument is properly documented and enforceable under Kenyan property, trust or company law before tokens are ever offered to investors.

Investor rights and disclosure

Where a tokenised interest carries investment characteristics, profit-sharing, appreciation expectations, or governance rights over the underlying asset, offering documentation should disclose the token's actual rights, the identity and obligations of the underlying asset owner, and the custody or trustee arrangements protecting the asset on investors' behalf. This overlaps with the security-token analysis in our capital-raising guide.

Custody and trustee arrangements

Because the underlying asset (a title deed, a private credit portfolio, a fund's assets) sits separately from the blockchain record, platforms should have a clear, documented answer to what happens to the underlying asset if the platform fails, and who is responsible for safeguarding it in the interim. A trustee or custodian arrangement independent of the platform operator strengthens investor protection and is generally viewed favourably by regulators assessing an offering.

Financial services overlap

Depending on structure, a tokenised offering may also engage collective investment scheme rules or securities law more generally, in addition to the VASP-specific tokenisation licence category. Founders should expect the regulatory analysis to run on two tracks, the VASP framework and the underlying capital markets or property law, rather than treating VASP licensing as the only compliance question.

Two separate approvals under Part VII of the Regulations

Part VII of the Virtual Asset Service Providers Regulations, 2026 splits real-world asset tokenisation into two distinct regulatory steps, both administered by the Capital Markets Authority, and a platform should not conflate them:

Regulation 61: the tokenisation licence itself

A person seeking to undertake the activity of virtual asset tokenisation must apply to the CMA for a licence. In addition to the general Regulation 6 application requirements, this application must include the rules of ownership, transferability, compliance and profit distribution where the tokenisation is based on distributed ledger technology, and an independent audit of the systems to be used in the tokenisation of the real-world asset. The CMA determines this application within thirty days of receiving all required documents and completing due diligence.

Regulation 62: approval of the specific offering

Separately, a person seeking to undertake a virtual asset offering of a tokenised real-world asset must apply to the CMA for approval of that specific offering. This application requires a white paper meeting the Regulation 63 disclosure standard; the issuer's governance structure, including its board and senior management; policies for monitoring the issuance and offering cycle; disclosure of where offering proceeds will be transferred or deposited; an independent valuer's report on the real-world asset's fair market value; disclosure of the underlying technology; an agreement on the proposed custody arrangements, including who holds title to and custody of the real-world asset; and evidence the asset is clear of encumbrances.

Eligibility of the underlying asset

Regulation 62(3) requires that a real-world asset intended for tokenisation have clear legal rights, and be independently verifiable with respect to its valuation, existence and condition. This is the regulatory expression of the point our companion structuring article makes: a token is only as good as the legal right behind it, and the Regulations now require independent verification of that right as a precondition to approval, not merely as good practice.

Listing tokenised assets on an exchange

Where a tokenised real-world asset is to be listed on a virtual asset exchange or token issuance platform, Regulation 60 requires the asset to have attained the minimum subscription disclosed in its CMA-approved white paper before listing, and requires the exchange or platform to notify the CMA of new listings or delistings monthly, by the tenth of the following month. The CMA retains the power to direct delisting where a material risk to financial stability or consumer protection is identified.

Structuring a tokenised real-world asset offering?

We structure the issuer, platform and custody roles so the token reflects an enforceable legal right.

Key legal & regulatory sources

• Kenya Law — Virtual Asset Service Providers Act, 2025 (Act No. 20 of 2025)
• Kenya Law — Virtual Asset Service Providers Regulations, 2026 (Legal Notice No. 134 of 2026)
• Central Bank of Kenya and Capital Markets Authority public guidance on VASP licensing

Frequently asked questions

Related insights

The information on this website is general in nature, is not legal advice, and does not create an advocate-client relationship. Figures, fees, capital thresholds and procedural requirements under the Virtual Asset Service Providers Act, 2025 and the Virtual Asset Service Providers Regulations, 2026 should be confirmed against the current Gazette text and regulator guidance before action is taken. Please contact Njau & Associates Advocates for advice on your specific circumstances.