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Kenya is poised to potentially lead the world in allowing industry representatives to develop the regulatory framework for cryptocurrency. The Blockchain Association of Kenya (BAK) has received a directive from the National Assembly’s Departmental Committee on Finance and National Planning to draft the initial version of what could become a “virtual asset service provider’s bill.”
On October 31, the Committee on Finance and National Planning invited BAK representatives to discuss the regulation of digital assets. Allan Kakai, BAK’s legal and policy director, shared insights from the meeting with local media, Mariblock:
“In essence, we are conveying to Parliament: ‘Kenya has always positioned itself as the Silicon Savannah, ranking among the top three in digital asset volume in Africa. Without a clear licensing and regulatory framework, Nigeria, South Africa, Botswana, Namibia, and Mauritius could take the lead, diverting capital flows away from Kenya.'”
In response to this urgency, the committee has given BAK a two-month timeline to draft the crypto bill. The official message on the committee’s X (formerly Twitter) account underscores the need for BAK to conduct comprehensive public education on cryptocurrency trading to demystify it.
Kenya introduced the Financial Act 2023 in September, which includes a provision requiring cryptocurrency exchanges to withhold 3% of the transfer or exchange value of digital assets. Despite BAK’s efforts to dissuade lawmakers from passing this crypto tax during a meeting in May, the association filed a complaint against it with the High Court of Kenya.
Notably, Kenyan authorities have taken a strict stance against the controversial digital ID crypto project, Worldcoin, co-founded by Sam Altman, the CEO of OpenAI. A parliamentary committee within the Kenyan government recommended the shutdown of the project’s operations in the country due to concerns over personal data harvesting.
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