Kenya might become the first country in the world where the industry’s representatives would develop the regulatory framework for crypto.
Kenya might become the first country in the world where the industry’s representatives would develop the regulatory framework for crypto. According to the Blockchain Association of Kenya (BAK), The National Assembly’s Departmental Committee on Finance and National Planning has directed it to prepare the first draft of “what could become a virtual asset service provider’s bill.”
On Oct. 31, the Committee on Finance and National Planning invited BAK representatives to discuss the digital assets regulation. BAK’s legal and policy director, Allan Kakai, shared the details behind the meeting with the local media:
“Basically, we are telling [the] parliament: ‘Look, Kenya has always branded itself as the Silicon Savannah; we are top three for digital assets [volume in Africa], and if we do not develop a clear licensing and regulatory framework, Nigeria, South Africa, Botswana, Namibia, Mauritius would take the lead, and the capital flow that would have come to Kenya would have flocked elsewhere.”
In response, the committee gave the BAK two months to draft the crypto bill. The message in the committee’s official X (formerly Twitter) account notes only that it “urged the Association to undertake robust public education on cryptocurrency trade to demystify it.”
In September 2023, Kenya introduced the Financial Act 2023, featuring the requirement for cryptocurrency exchanges to withhold 3% “of the transfer or exchange value of the digital asset.” The BAK, whose members haven’t gotten to dissuade the lawmakers from passing this crypto tax at the meeting in May, filed a complaint against it to the High Court of Kenya.
Kenyan authorities took a harsh stance against the controversial digital ID crypto project Worldcoin, co-founded by Sam Altman, the CEO of OpenAI. A parliamentary committee in Kenya’s government recommended that regulators shut down the project’s operations in the country, citing the personal data harvesting concerns.