The Treasury Cabinet Secretary of Kenya, John Mbadi, has announced plans to introduce legislation to legalize cryptocurrencies in the country. This marks a significant shift from the government’s previous warnings against the industry. Mbadi highlighted the emergence and growth of Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs), stating that they bring both opportunities and challenges to the financial system.
According to a report by The Standard, Mbadi emphasized the need for a regulatory framework to harness the benefits of cryptocurrencies while addressing risks such as money laundering, terrorism financing, and fraud. He stated, “The Government of Kenya is committed to creating the necessary legal and regulatory framework to leverage opportunities presented by VAs and VASPs while managing the potential risks.”
In December, Kenya unveiled a draft policy on virtual assets and service providers with the goal of establishing a fair, competitive, and stable market for the cryptocurrency industry. The policy aims to promote innovation and financial literacy among industry players.
Despite Kenya’s previous cautious stance towards cryptocurrencies, the country is now considering taxing crypto assets as the industry continues to grow. A report by the United Nations revealed that approximately 8.5% of Kenyans currently own cryptocurrencies.
It is evident that Kenya is embracing the potential of cryptocurrencies and is taking steps to regulate the industry to ensure both opportunities and risks are managed effectively. This move signifies a major shift in the country’s approach to digital assets. The Treasury’s initiative to legalize cryptocurrencies reflects a progressive outlook towards financial innovation and technology in Kenya.
As the cryptocurrency industry continues to evolve globally, Kenya’s decision to legalize and regulate cryptocurrencies is a significant development that could have far-reaching implications for the country’s financial sector. It will be interesting to see how this new legislation unfolds and how it impacts the cryptocurrency landscape in Kenya.