Kenya Moves to Legalize Cryptocurrencies with New Legislation in the Works
Kenya’s Treasury Cabinet Secretary John Mbadi has announced that the country is in the process of preparing legislation to legalize cryptocurrencies, marking a significant shift from the government’s previous warnings against the industry.
“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,” Mbadi stated, as reported by local news outlet The Standard.
Mbadi emphasized the need for a regulatory framework that would allow the country to harness the potential benefits of the cryptocurrency industry while also addressing the risks associated with money laundering, terrorism financing, and fraud.
“The Government of Kenya is committed to creating the necessary legal and regulatory framework in order to leverage opportunities presented by VAs and VASPs while managing the reluctant risks,” Mbadi affirmed.
In December, Kenya introduced a draft policy on virtual assets and virtual asset service providers. The aim of this policy is to establish a “fair, competitive, and stable market” for cryptocurrency industry participants, promote innovation, and enhance financial literacy, according to Mbadi.
Kenya’s Shifting Stance on Cryptocurrencies
Historically, Kenya has maintained a cautious approach towards the cryptocurrency industry. Back in December 2015, the country’s central bank issued a public notice cautioning against the use of cryptocurrencies, stating that these assets were not considered legal tender in Kenya and that no entity was authorized to provide money remittance services using crypto.
However, as the cryptocurrency industry continued to grow in Kenya, lawmakers began considering the possibility of implementing a law to regulate and tax crypto transactions. A report from the United Nations revealed that approximately 8.5% of Kenyans were already involved in cryptocurrency ownership by 2022.
Despite the progress towards legalizing cryptocurrencies in Kenya, CoinDesk did not receive a response from Kenya’s Treasury at the time of publication.