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Kenya Proposes Policy to Enhance Crypto Oversight and Regulation
Kenya is considering implementing a policy that would require crypto providers to establish local offices, aiming to enhance regulatory oversight of the country’s rapidly growing virtual asset industry.
Key Provisions of the Proposed Law
The proposed law, currently available for public input on the National Treasury’s website, would exclude businesses dealing with assets that cannot be traded, transferred, or used for payments outside a closed system. The policy “seeks to close the gaps in the absence of a legal and regulatory framework for virtual assets and virtual asset service providers.” The proposal also aims to address crucial issues such as:
- Consumer protection
- Data privacy
- Cybersecurity
The move to introduce the policy comes as crypto adoption continues to rise in Kenya. According to the Global Cryptocurrency Adoption Index by Chainalysis, Kenya ranks 28th out of 155 countries, with crypto “undeniably transforming the financial landscape of the region, home to a number of high-ranking nations […].”
Current State of Crypto Regulation in Kenya
In 2023, Kenya introduced a 3% tax on crypto transactions. However, the sector still lacks clear regulations. If the draft law passes, crypto businesses operating in the country will be required to establish a local presence, providing the government with a better way to monitor their activities.
Establishing a local office would enable the government to have a closer eye on crypto businesses, ultimately enhancing regulatory oversight and consumer protection.
While the exact timeline for the implementation of the proposed law is unclear, it is evident that Kenya is taking steps to develop a more comprehensive regulatory framework for its virtual asset industry.
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