Kenya’s cryptocurrency sector, valued at nearly $20 billion, enters a new chapter as the government takes significant steps towards regulation. The Kenyan Parliament has tasked the Blockchain Association of Kenya (BAK) with drafting the pioneering Virtual Asset Service Provider’s Bill, marking a proactive stride in the crypto space.
This legislative move is set to transform Kenya’s already significant crypto market, which has been operating under the radar despite being subject to taxes under the recent Finance Act, of 2023.
The push for regulation reflects Kenya’s robust engagement with digital assets, ranking third in Africa for crypto site traffic and 21st globally in adoption. It’s a telling sign of the country’s burgeoning status in the global crypto economy and its forward-thinking approach to harnessing the potential of virtual currencies.
BAK’s involvement comes after its opposition to the Digital Asset Tax (DAT) in the Finance Act, of 2023, and its subsequent presentations to the National Assembly Committee on Finance and National Planning.
The association’s directive to draft the bill is a rare instance of a non-governmental body being commissioned to lay the legislative groundwork for an entire sector, highlighting the urgency and importance placed on the crypto market in Kenya.
What to expect
As BAK prepares the first draft, the bill is anticipated to address several key areas: a clear licensing structure, a comprehensive tax framework, consumer protection guidelines, and measures to combat money laundering and terrorism financing.
This mirrors the efforts of other African nations, such as South Africa, Nigeria, and Mauritius, which have been leading the charge in crypto market values and regulatory frameworks.
Kenya’s proactive stance in regulating its Kenyan crypto market is not only a significant development for the country itself but also sets a precedent for other nations looking to balance the fostering of innovation with the need for oversight in the rapidly evolving world of digital currencies.
As Kenya embarks on this regulatory journey, the crypto bill is expected to bring clarity and security to the market, potentially ushering in a new era of growth and stability for the country’s digital economy. With a vision for a well-regulated and flourishing Kenyan crypto market, the nation is positioning itself as a leader in the adoption and management of virtual assets on the continent.
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