The Republic of Kenya is currently making moves to create a legal framework for crypto operations. Interestingly, this rather exciting development comes shortly after the International Monetary Fund (IMF) recommended the East African nation overhaul its current crypto policy and align with global standards.
Kenya Takes Aim At Crypto Regulation
In an effort to adopt a more inclusive approach toward the crypto industry, the Kenyan government through its National Treasury and Economic Planning Department has called for public consultation on its proposed regulatory structure.
This framework centers around two documents, one of which is “The Draft National Policy On Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs)” which aims to guide the governance of VAs and VASPs as well ensure a fair and efficient market for all stakeholders among other objectives.
The second document is a proposed legislation named the “The Virtual Asset Service Providers Bill, 2025” which focuses on the designation of regulatory authorities and licensing requirements for VASPs. This bill will also highlight general obligations for VASPs in regards to prevention of money laundering, terrorism financing and proliferation financing.
Public consultations on both documents will run till January 24, before which all Kenyans and relevant stakeholders are invited to submit their opinions on the proposed crypto framework.
Kenya Set To Reverse Anti-Crypto Stance
In 2015, the Kenyan Central Bank issued a warning on the use of cryptocurrencies as they banned its use as a legal tender. However, the digital assets movement has remained strong in the East African nation with about 2.8 million Kenyans being crypto owners.
With calls for public consultations on a proposed crypto regulatory structure, the Kenyan government appears ready to embrace the potential of this nascent industry.
Commenting on this sudden move to legalize virtual assets, the nation’s Cabinet Secretary for Treasury & Economic Planning, John Mbadi shows the significant change in policy. According to local media The Saturday Standard, Mbadi said:
The emergence and growth of Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs) have given rise to innovations in the local and international financial system with dynamic opportunities and challenges.
The Cabinet Secretary also recognizes the current woes of the crypto industry including fraud, money laundering etc., but believes that these risks can be contained by an efficient regulatory system.
As earlier stated, Kenya’s U-turn on crypto comes shortly after a nudge by the IMF. In a technical assistance report, The United Nations’ financial agency had advised Kenya to step up its crypto regulation through the adoption of a clear legislative framework, and ensure consumer protection through financial literacy among other recommendations.
At press time, the crypto market cap is valued at $3.21 trillion following a 0.55% loss in the past day.
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