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Virtual assets service providers to be regulated with draft bill

Kenya Cryptocurrency
Kenya Cryptocurrency

The Blockchain Association of Kenya (BAK) has introduced its first-ever Virtual Assets Service Provider (VASP) draft Bill.

The draft bill proposes a comprehensive framework encompassing licensing, consumer protection, anti-money laundering, and a regulatory sandbox.

The bill’s introduction follows a series of policy-focused community engagements initiated by BAK. In June 2023, Kenya signed into law the Finance Act 2023. The Act, which had a 3% gross tax on digital assets, was actively challenged by the BAK. They submitted their concerns, petitioned the High Court, and held industry workshops. Ultimately, lawmakers recognised the need for dedicated regulations and tasked BAK with crafting a billto govern the cryptocurrency industry in Kenya.

Until February 7, stakeholders worldwide can review the draft and contribute their voices. This approach ensures the final Bill reflects the needs of everyone involved. After that, BAK will revise and incorporate feedback into the next iteration of the Bill and deliver it to the National Assembly’s Departmental Committee on Finance and National Planning by February 14, the same committee that tasked the association to develop the draft bill.

If passed, this bill will attract international investments and talent, positioning Kenya as a leader in Africa’s crypto space. BAK also aims to attract $1 billion in Foreign Direct Investment (FDI) by 2027, supporting Kenya’s economic recovery.

Other African countries like Nigeria are also taking steps to regulate their cryptocurrency industry. After initially banning crypto in 2021, Nigeria’s Central Bank has lifted its ban in December 2023, and now aims to regulate “virtual asset providers.” Banks can now serve crypto providers, but only those licensed by the Securities and Exchange Commission (SEC).

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