Kenya's $20B Crypto Market Advances Regulatory Framework

Hui Xin

2023/11/08 14:13

Kenya's Crypto Regulation Initiative

The National Assembly's Departmental Committee on Finance and National Planning has directed us and other industry stakeholders to prepare the first draft of what could become a virtual asset service provider's bill.

What are your thoughts?

Here are @RobertMuoka's comments. pic.twitter.com/Hr0YgdLQMg
— Blockchain Association of Kenya (BAK) (@BlockchainKenya) November 6, 2023

The Blockchain Association of Kenya (BAK) has been tasked by the National Assembly’s Departmental Committee on Finance and National Planning to prepare the initial draft of a bill aimed at governing virtual asset service providers.

Drafting Crypto Bill

In a recent engagement with the Committee on Finance and National Planning on 31 October, BAK's legal and policy director, Allan Kakai, emphasised Kenya's position in the digital asset landscape.

The Blockchain Association of Kenya is currently engaging with the Departmental Committee on Finance and National Planning over the Digital Asset Policy and Regulation in Kenya. pic.twitter.com/jhkOfEa8XW
— NAssembly KE C'tees (@NACommitteeKE) October 31, 2023

Allan Kakai, expressed:

“Basically, we are telling [the] parliament: ‘Look, Kenya has always branded itself as the Silicon Savannah; we are top three for digital assets [volume in Africa], and if we do not develop a clear licensing and regulatory framework, Nigeria, South Africa, Botswana, Namibia, Mauritius would take the lead, and the capital flow that would have come to Kenya would have flocked elsewhere.”

Kakai stressed the need for a comprehensive licensing and regulatory structure, citing Kenya's significant standing in Africa's digital assets volume.

The absence of such a framework could lead to a shift in capital flow to competing nations like Nigeria, South Africa, Botswana, Namibia, and Mauritius.

Following the discussion, the committee granted Blockchain Association of Kenya a two-month window to formulate the proposed crypto bill.

Additionally, the committee encouraged the association to undertake extensive public education on cryptocurrency trading to demystify its complexities.

In a previous legislative move, Kenya introduced the Financial Act 2023 in September, which mandated cryptocurrency exchanges to withhold 3% of the transfer or exchange value of digital assets.

Although BAK members were unable to dissuade the passing of this crypto tax during a May meeting, they subsequently filed a complaint against it in the High Court of Kenya.

Worldcoin Project

Meanwhile, Kenyan authorities took a firm stance against the Worldcoin project, a digital ID crypto initiative co-founded by Sam Altman, the CEO of OpenAI.

A parliamentary committee within the Kenyan government recommended the shutdown of the project's operations in the country due to concerns over potential personal data harvesting.

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