The Kenyan government is drafting legislation to regulate cryptos. This initiative aims to structure the sector while addressing challenges tied to its growing adoption.
Kenya begins legalizing digital assets
Kenya is taking a significant step in regulating cryptos. Treasury Secretary John Mbadi announced this week that the government is finalizing a bill to legalize these digital assets. Until now, the use of crypto has grown in a legal gray area. Despite this lack of clarity, cryptos remain widely adopted by individuals and businesses across the country.
The proposed legislation is designed to protect consumers and mitigate risks such as money laundering and fraud. It also seeks to create an environment conducive to innovation and investment. The framework aims to enhance transparency and encourage a controlled adoption of crypto assets on a national scale.
Since 2023, Kenya’s parliamentary finance committee has tasked the Blockchain Association of Kenya (BAK) with drafting a regulatory framework for cryptos. Working with local stakeholders, the BAK has been developing clear guidelines for the sector. According to Allan Kakai, the association’s director, this move is crucial to positioning Kenya as a leader in Africa’s digital economy.
Cryptos as a key economic driver
In addition to regulation, Kenya has been ramping up its efforts to integrate cryptos into its economy. In 2024, the Kenya Revenue Authority (KRA) collected $77.5 million in crypto-related taxes. This revenue, generated by 384 local traders, highlights the growing role of cryptos in the country’s economic fabric. The government now aims to generate $465 million in crypto taxes over the next five years.
Kenya’s capital markets are also shifting towards blockchain technology. The Nairobi Securities Exchange (NSE) recently joined the Hedera Council to accelerate the tokenization of financial assets. This strategic collaboration leverages the Hedera blockchain to digitize transactions, making Kenya more attractive to international investors.
Other African nations are also advancing in crypto regulation. Morocco, for example, announced in late 2024 a bill to clarify its stance on digital assets after years of regulatory uncertainty. The country’s central bank is also exploring the development of a central bank digital currency (CBDC).
Moral Lesson : Kenya is finally casting a net to catch the crypto fish before it swims too far.
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