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Kenya National Assembly directs BAK to prepare crypto bill

The National Assembly has asked BAK to prepare a draft of crypto regulations in Kenya, making it the first country to have industry representatives do so.

Shashank Bhardwaj
Published: Nov 9, 2023 11:36:48 AM IST
Updated: Nov 9, 2023 11:40:37 AM IST

Kenya National Assembly directs BAK to prepare crypto billImage: Shutterstock

On Nov 6, the Blockchain Association of Kenya (BAK) announced that the National Assembly’s Departmental Committee on Finance and National Planning has directed it to prepare the first draft of a virtual asset service provider’s bill for regulating crypto in Kenya.

BAK appeared before the committee on Oct 31 to discuss digital asset regulation. The agenda of the discussion was to develop a collaborative approach to how BAK can work with the national government in developing favourable policies for digital assets.

The BAK team presented to the committee some crucial areas to be kept in focus to establish a sound crypto regulatory framework. The areas included licensing, taxation, consumer protection, anti-money laundering and counter-terrorism financing (AMl/CTF), and implementation of a regulatory sandbox.

To underscore the necessity of a clear regulatory framework in the country, BAK pointed to Kenya’s global adoption index rank of 19 (by analysis firm Chainalysis) and its $19 billion crypto volume between July 2021 and June 2022.

In response, the parliamentary committee requested BAK to draft and submit a bill for digital assets regulations within two months.

According to BAK’s legal and policy director, Allan Kakai, “For the first time, a parliamentary committee has directed an association or a stakeholder group to draft a parliamentary bill and bring it to parliament for adoption. This is very interesting because this has never happened with the Bank Association, this has never happened with the Fintech Association, this has never happened with the Digital Lenders Association, this has never happened with any association at all.”

Robert Muoka, CEO of Kenyan prop-tech startup MyShamba Digital, also commented on the matter, saying, “This marks a giant leap towards Kenya’s journey to become a global leader in innovation and digital finance. We are setting the stage for Kenya to shine as a hub for the digital economy, and this journey is filled with boundless opportunities and transformative potential.”

However, challenges lie ahead. A robust crypto regulation has to address regulators’ concerns, including those of the Central Bank of Kenya, the Capital Market Authority, the tax authority, and other financial regulators.

Despite these challenges, Kenya’s move to involve industry representatives in developing the regulatory framework is a commendable step. If successful, it could serve as a model for other countries seeking to establish a safe and sustainable future for the web3 space.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash