Kenya Prepares to Legalize Cryptocurrencies: Report

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Kenya is set to introduce legislation to legalize cryptocurrencies, marking a policy shift, according to a local report quoting Treasury Cabinet Secretary John Mbadi.

Speaking on Friday, Mbadi outlined the government’s plans to create a regulatory framework for cryptocurrencies, an industry that has operated in the shadows despite an official ban.

“The Government of Kenya is committed to creating the necessary legal and regulatory framework in order to leverage opportunities presented by VAs and VASPs while managing the resultant risks,” he added.

While recognizing the risks associated with cryptocurrencies, such as money laundering, terrorism financing, and fraud, Mbadi emphasized that a legal framework would allow Kenya see the benefits of the crypto market while mitigating its dangers.

“Kenya’s financial sector is a beacon of innovation and growth in Africa,” Mbadi stated.  “The emergence and growth of Virtual Assets and Virtual Asset Service Providers have given rise to innovations in the local and international financial system with dynamic opportunities and challenges.”

This initiative aligns with recent calls from the International Monetary Fund (IMF), which urged Kenya to develop regulations to address consumer protection and financial crime concerns related to cryptocurrencies. In a technical assistance report released on January 8, the IMF outlined shortcomings in Kenya’s current regulatory approach to crypto assets.

The proposed policy seeks to establish a fair and competitive crypto market and improve financial literacy across the country.

IMF Urges Kenya to Establish Clear Crypto Regulations