Kenya is stepping into the limelight with plans to establish a legal framework for cryptocurrency operations. This intriguing development follows closely on the heels of a recommendation from the International Monetary Fund (IMF) urging the nation to reform its crypto policies to align with international standards.
Kenya Moves Toward Crypto Regulation
Seeking to adopt a more inclusive stance on the burgeoning crypto industry, the Kenyan government, through its National Treasury and Economic Planning Department, is reaching out for public input on a newly proposed regulatory framework.
The framework is built on two key documents. The first is "The Draft National Policy on Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs)," designed to guide the governance of virtual assets and their providers, aiming for a fair and efficient market.
The second document, titled "The Virtual Asset Service Providers Bill, 2025," outlines a legislative proposal that details regulatory authorities’ roles and sets licensing requirements for VASPs. Additionally, this bill emphasizes the obligations of VASPs in combatting money laundering, terrorism financing, and other financial crimes.
The public consultation period for these documents is open until January 24, during which time Kenyans and other stakeholders are encouraged to share their thoughts and feedback on the proposed changes.
Kenya Ready to Rethink Its Crypto Stance
Back in 2015, the Central Bank of Kenya issued warnings against using cryptocurrencies and banned them from being used as legal tender. Despite this, digital assets have maintained a strong presence in Kenya, with approximately 2.8 million crypto owners in the nation.
Now, with the call for public dialogue on crypto regulation, the government appears set to embrace the potential of this emerging sector.
Commenting on this policy shift, John Mbadi, the Cabinet Secretary for Treasury & Economic Planning, highlighted the importance of fintech innovations. According to a report by The Saturday Standard, Mbadi stated:
"The emergence and growth of Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs) have driven innovations within both local and international financial systems, presenting both dynamic opportunities and challenges."
Mbadi acknowledges the current issues within the crypto space, such as fraud and money laundering, but expresses confidence that a robust regulatory framework can manage these risks effectively.
This change in Kenya’s approach comes in the wake of guidance from the IMF. In a technical assistance report, the global financial institution recommended Kenya enhance its crypto regulations with clear legislative guidelines and bolster consumer protection through financial literacy initiatives.
As of now, the cryptocurrency market is valued at $3.21 trillion, reflecting a 0.55% decrease over the past day.
Featured image from Pinterest, chart sourced from Tradingview.com
