- Kenya has introduced a draft policy to regulate cryptocurrencies, aiming to establish a fair and stable market while addressing money laundering risks.
- Public feedback is open on Kenya’s proposed crypto regulations, which could align the country with South Africa and Nigeria’s regulatory frameworks.
Kenya is taking significant steps toward regulating cryptocurrencies, signaling a shift from its historically cautious stance. Treasury Cabinet Secretary John Mbadi announced on Jan. 10 that the government is committed to establishing a legal and regulatory framework for virtual assets. This marks a potential turning point in the nation’s approach to digital currencies.
The announcement coincides with the release of a draft proposal titled “National Policy on Virtual Assets and Virtual Asset Service Providers.” The document outlines plans to foster a fair, competitive, and stable cryptocurrency market while addressing key risks, including money laundering, terrorism financing, and consumer protection. The draft also calls for comprehensive regulations governing virtual asset activities and service providers.
Public feedback on the policy is invited until Jan. 24, after which it may pave the way for Kenya to join other African nations like South Africa and Nigeria in implementing crypto regulations. These countries have already established frameworks to oversee the burgeoning crypto industry.
The Central Bank of Kenya (CBK) has historically issued warnings about cryptocurrencies, cautioning against their use due to concerns over fraud and their potential for enabling illicit activities. In 2015, the CBK publicly advised against transacting in Bitcoin and similar assets, citing the lack of legal protections. However, a key shift occurred in September 2023, when Kenya completed a risk assessment on virtual assets.
Kenya ranks 21st globally on the 2024 Chainalysis Crypto Adoption Index, with stablecoins comprising a significant portion of its transaction volume. Between July 2023 and July 2024, Kenya recorded $3.3 billion in stablecoin transactions. Neighboring nations like Nigeria, South Africa, and Ghana have reported higher transaction volumes, highlighting the growing prominence of stablecoins across Sub-Saharan Africa.
If enacted, the proposed regulatory framework could position Kenya as a leader in the region’s evolving crypto landscape.
Editorial Note: This news article has been written with assistance from AI. Edited & fact-checked by Harshajit Sarmah.
