The Republic of Kenya is currently taking steps to create a legal framework for cryptocurrency operations. Interestingly, this exciting development comes shortly after the International Monetary Fund (IMF) recommended the East African country to reform its current cryptocurrency policy and bring it in line with global standards.
Kenya aims to regulate cryptocurrencies
In an effort to adopt a more comprehensive approach towards the cryptocurrency industry, the Kenyan government through the Ministry of National Treasury and Economic Planning has called for public consultations on its proposed regulatory structure.
This framework revolves around two documents, one of which is “Draft National Policy on Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs)“Which aims to guide the governance of VAs and VASPs as well as ensuring a fair and efficient market for all stakeholders among other objectives.
The second document is a proposed legislation called “Virtual Asset Service Providers Bill 2025 Which focuses on setting regulatory authorities and licensing requirements for virtual asset service providers. This bill will also highlight the general obligations of virtual asset service providers with regard to preventing money laundering, terrorist financing and proliferation financing.
Public consultations on both documents will continue until January 24, before which all Kenyans and relevant stakeholders are invited to submit their views on the proposed cryptocurrency framework.
Kenya is preparing to reverse its anti-crypto stance
In 2015, the Central Bank of Kenya issued a warning on the use of cryptocurrencies as it banned their use as legal tender. However, the digital asset movement has remained strong in the East African country with approx 2.8 million Kenyans They are the owners of the encryption.
With calls for public consultations on the proposed regulatory structure for cryptocurrencies, the Kenyan government appears ready to embrace the potential of this emerging industry.
Commenting on the surprising move to legalize virtual assets, the country’s Minister of Treasury and Economic Planning, John Mbadi, explains the major policy change. According to local media, Mbadi said:
The emergence and growth of Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs) has created innovations in the domestic and international financial system with dynamic opportunities and challenges.
The Cabinet Secretary is also aware of the current problems of the cryptocurrency industry including fraud, money laundering, etc., but believes that these risks can be contained through an effective regulatory system.
As mentioned earlier, Kenya’s complete shift on cryptocurrencies comes shortly after the IMF stimulus. In a Technical assistance reportThe United Nations financial agency has advised Kenya to strengthen regulation of cryptocurrencies by adopting a clear legislative framework, ensuring consumer protection through financial literacy among other recommendations.
At press time, the cryptocurrency market cap stands at $3.21 trillion after a 0.55% loss in the past day.
Featured image from Pinterest, chart from Tradingview
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