Currently, the nation of Kenya is working on establishing a regulatory system for cryptocurrency transactions. Notably, this recent progress follows advice from the International Monetary Fund (IMF), who suggested Kenya should update its existing crypto regulations to match international norms.
Kenya Takes Aim At Crypto Regulation
To foster a more welcoming attitude towards cryptocurrencies, Kenya’s government (specifically, the National Treasury and Economic Planning Department) invites the general public to share their thoughts on the regulatory framework they are considering implementing.
The focus of this structure revolves around two key papers, one being “The Proposed National Policy on Digital Assets (DAs) and Digital Asset Service Providers (DASPs)”. This document is designed to provide direction in the administration of DAs and DASPs while fostering a balanced and streamlined market for all participants, as well as pursuing other objectives.
The second paper presents a draft law titled “The Virtual Asset Service Providers Act of 2025,” which primarily outlines the assignment of regulatory bodies and licensing conditions for VASPs. This legislation will also emphasize key responsibilities for VASPs in preventing money laundering, terrorism funding, and weapons proliferation financing.
The public is invited to provide feedback on two related documents regarding cryptocurrency regulations. This consultation period ends on January 24th. Everyone in Kenya and those with a vested interest are encouraged to share their views about the proposed cryptocurrency framework before this date.
Kenya Set To Reverse Anti-Crypto Stance
In 2015, the Central Bank of Kenya prohibited the use of cryptocurrencies as legal tender, but issued a warning instead. Despite this ban, the interest and ownership of digital assets has persisted in Kenya, with approximately 2.8 million Kenyan residents owning cryptocurrencies.
The Kenyan government seems poised to welcome the possibilities of the emerging cryptocurrency sector, as they initiate discussions for public input regarding a potential regulatory framework.
As a financial analyst, I am observing a remarkable shift in policy regarding virtual assets, as announced by our Cabinet Secretary for Treasury & Economic Planning, John Mbadi. This transformation, as reported by The Saturday Standard, signals a new era in our nation’s approach to these digital assets.
The increase and expansion of Virtual Assets (VAs) and providers of Virtual Asset Services (VASPs) has sparked a wave of advancements within both domestic and global financial systems, presenting unique and evolving prospects as well as complications.
The Cabinet Secretary acknowledges the challenges currently facing the cryptocurrency sector, such as fraud and money laundering, among others. However, they maintain that a well-structured regulatory framework could effectively manage and mitigate these risks.
Previously mentioned, Kenya’s change in stance towards cryptocurrencies follows a gentle push from the IMF. In a technical assistance report, the financial arm of the United Nations suggested that Kenya strengthen its crypto regulations by establishing a clear legal framework, and also emphasized the importance of consumer protection through financial education among other proposals.
Currently, the total value of the cryptocurrency market stands at approximately $3.21 trillion, after experiencing a decrease of 0.55% over the last 24 hours.
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2025-01-12 03:41