The International Monetary Fund (IMF) has released a report urging Kenya to develop a transparent and stable regulatory framework for the cryptocurrency sector.
Current Regulatory Situation
Kenya's existing regulatory framework is outdated and has led to increased scams and criminal activities in the crypto sector. During discussions in Nairobi, IMF officials noted a lack of consensus among lawmakers on crypto regulations.
Reform Recommendations
The IMF recommends that Kenya establish a regulatory framework aligned with global standards such as the Bali Fintech Agenda and FATF Recommendations. In the short term (6–12 months), they suggest empirical analysis and enhanced collaboration among regulatory authorities. Medium- to long-term (12–24+ months) actions include implementing legal frameworks and aligning regulations with international norms.
Financial Agreement with El Salvador
The IMF recently established a $1.4 billion financing agreement with El Salvador as part of a 40-month Extended Fund Facility. A key condition is the reduction of Bitcoin-related activities in the public sector. The total support package could exceed $3.5 billion.
Developing a modern regulatory framework is crucial for Kenya to protect consumers and ensure financial stability in the evolving crypto market.
