Kenya is taking steps to legalize and regulate cryptocurrencies by developing the necessary legislative measures.
Background to Kenya's New Legislation
On January 10, Treasury Cabinet Secretary John Mbadi stated the government's commitment to creating a legal and regulatory framework for cryptocurrencies. This initiative is part of a new draft titled 'National Policy on Virtual Assets and Virtual Asset Service Providers,' aimed at creating a fair, competitive, and stable market for cryptocurrencies in Kenya, addressing issues like money laundering, terrorism financing, and consumer protection. The proposal is open for public feedback until January 24.
Kenya's Path in Crypto Regulation
In December 2015, the Central Bank of Kenya issued a warning against the use of cryptocurrencies, citing fraud risks and their potential involvement in illicit activities. A turning point came in September 2023, when Kenya completed a money laundering and terrorism financing risk assessment related to virtual assets, leading to recommendations for their regulation.
Kenya in Africa's Crypto Success Context
According to Chainalysis' 2024 report, Kenya ranks 21st globally on the crypto adoption index. Stablecoin transactions make up nearly half of the total transaction volume in the region, largely due to currency devaluation. From July 2023 to July 2024, Kenya received $3.3 billion worth of stablecoins.
Kenya is taking significant steps towards integrating cryptocurrencies into its economy, while providing a robust regulatory framework to protect market participants and prevent financial risks.
