The International Monetary Fund (IMF) emphasizes the need for Kenya to modernize its cryptocurrency legislation in line with international standards to enhance financial stability.
Current Trends in Crypto Legislation
On January 8, the IMF published a technical report after Kenya's Capital Markets Authority sought advice. The report states that existing regulations are outdated for traditional markets and lack significant authority over cryptocurrency, leading to issues with scams and unlawful activities.
Recommendations for Kenya
The IMF outlined short-term and long-term steps for overhauling Kenya's crypto regulations. Short-term goals include conducting an empirical analysis of the crypto market, fostering collaboration and education among authorities, and clarifying the scope of current regulations to cover crypto assets. Long-term goals involve establishing a legal and licensing framework for crypto businesses and aligning Kenya’s crypto framework with international standards.
Strengthening Oversight
The IMF recommended that Kenya move beyond surveys and questionnaires to gain a deeper understanding of the crypto landscape. Authorities are urged to clearly define crypto assets under financial laws and avoid conflicting terminologies like 'digital currency' and 'virtual asset' to minimize legal loopholes.
The IMF stresses the importance of creating a clear and predictable regulatory environment in Kenya that can protect consumers and support financial stability, considering the specific challenges and opportunities of the country's crypto market.
