New legislation aims to harness crypto innovation while tackling fraud, money laundering, and terrorism financing risks.
Kenya Eyes Legal Framework for Cryptocurrencies
Kenya is preparing to legalize cryptocurrencies, marking a significant policy shift. Treasury Cabinet Secretary John Mbadi emphasized the government’s commitment to leveraging the potential of virtual assets while mitigating risks like fraud and terrorism financing.
From Caution to Embrace
Kenya’s stance on cryptocurrencies has evolved. In 2015, the central bank warned against crypto use, citing their lack of legal tender status. However, with growing adoption, the government is now pursuing a fair and competitive market for industry players.
Draft Policy Sets the Stage
A draft policy on virtual assets and service providers was introduced in December. It aims to foster innovation, financial literacy, and a stable market for the cryptocurrency industry in Kenya.
Rising Crypto Adoption in Kenya
Kenya ranks high in cryptocurrency adoption, with a 2022 UN report revealing that 8.5% of the population owned cryptocurrencies. Lawmakers have previously considered taxing crypto, reflecting its growing influence in the economy.
Balancing Innovation and Risk Management
“The Government of Kenya is committed to creating the necessary legal and regulatory framework to leverage opportunities while managing reluctant risks,” Mbadi stated.
Kenya’s move is expected to foster innovation in the financial sector while addressing challenges associated with the crypto industry.
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