Kenya’s Treasury Cabinet Secretary John Mbadi said the country is preparing legislation to legalize cryptocurrencies, a change from the government’s previous warnings against the industry.
“The emergence and growth of Virtual Assets (VA) and Virtual Asset Service Providers (VASP) have given rise to innovations in the local and international financial system with dynamic opportunities and challenges,” Mbadi was quoted as saying by the local news outlet. The Standard.
Mbadi emphasized the need for a regulatory framework to capitalize on the potential benefits of the industry while mitigating the risks posed by money laundering, terrorist financing and fraud.
“The Government of Kenya is committed to creating the necessary legal and regulatory framework to take advantage of the opportunities presented by VAs and VASPs while managing the reluctant risks,” Mbadi said.
Kenya launched a draft policy on virtual assets and virtual asset service providers in December. The draft policy aims to establish a “fair, competitive and stable market” for cryptocurrency industry players and encourage innovation and financial education, Mbadi said.
Kenya has historically maintained a cautious stance towards the cryptocurrency industry. In December 2015, the country’s central bank issued a public notice warning against the use of cryptocurrencies, stating that these assets were not legal tender in the country and that no entity was licensed to offer money transfer services using cryptocurrencies in Kenya. .
Fast forward to 2022 and the country’s lawmakers began weighing whether to move forward with a law to tax cryptocurrencies as the industry continued to grow in the country. A United Nations report at the time showed that approximately 8.5% of Kenyans owned cryptocurrencies.
CoinDesk did not receive a response from the Kenyan Treasury by press time.
