- The Blockchain Association of Kenya (BAK) has been instructed by Kenyan lawmakers to draft a potential virtual asset service provider’s bill.
- This initiative could position Kenya as a global frontrunner in crypto regulation, directly involving industry experts in policy formulation.
The Genesis of a Regulatory Framework
In an unprecedented move, Kenya could emerge as the first nation globally to entrust the creation of its cryptocurrency regulations to the very professionals who spearhead the industry. The Blockchain Association of Kenya (BAK) has received a directive from the National Assembly’s Departmental Committee on Finance and National Planning to develop what might become a foundational document for virtual asset service providers.
A Crucial Meeting and Its Aftermath
On the last day of October, BAK representatives were summoned before the Committee on Finance and National Planning to deliberate on the regulatory approach towards digital assets. Allan Kakai, BAK’s legal and policy director, conveyed the substance of this pivotal gathering to Mariblock, a local media outlet. He underscored Kenya’s distinction as ‘Silicon Savannah’ and highlighted the nation’s significant digital asset volume, third in ranking across Africa.
Kakai cautioned that without a definitive licensing and regulatory framework, Kenya risks losing its competitive edge and capital inflow to other African nations that are rapidly developing their own crypto regulations. His argument evidently resonated with the committee, resulting in a two-month deadline for BAK to present a draft for the crypto bill.
The committee’s communiqué, as per its official X (formerly known as Twitter) account, called upon the Association to also engage in extensive public education about cryptocurrency trade, with the intent to clarify and simplify the concept for the general populace.
Navigating Fiscal Policies and Data Privacy Concerns
In a separate but related development, Kenya’s introduction of the Financial Act 2023 cast a spotlight on the cryptocurrency landscape by mandating crypto exchanges to retain 3% of the transfer value of digital assets. The BAK, despite its unsuccessful attempt to dissuade lawmakers from instituting this tax earlier in May, has since taken its grievances to the High Court of Kenya.
Moreover, Kenyan authorities have exhibited a stringent approach towards digital ID projects linked with cryptocurrencies, such as the Worldcoin initiative co-founded by Sam Altman. Concerns over personal data collection have prompted a parliamentary committee to advise regulatory bodies to cease the project’s operations within Kenya, signifying the government’s active stance on protecting personal data in the wake of new technological integrations.