Kenya is poised to set a global precedent by developing a regulatory framework for cryptocurrencies in collaboration with industry stakeholders. The Blockchain Association of Kenya (BAK) reported that the National Assembly’s Finance and National Planning Sector Committee has instructed BAK to prepare an initial draft of the Virtual Asset Service Providers Bill.
This significant development emerged on October 31 when the Finance and National Planning Committee invited representatives from BAK to deliberate on matters related to the supervision of digital assets. Allan Kakai, the legal and policy director at BAK, discussed the details of the meeting in a conversation with local news outlet Mariblock.
Kakai conveyed BAK's message to the parliament, emphasizing Kenya's prominence in the digital assets space. He stated that Kenya, often regarded as the "Silicon Valley Savanna," ranks among the top three countries in Africa in terms of digital assets trading volume. Kakai expressed concerns that without a clear licensing and regulatory framework, Kenya might fall behind Nigeria, South Africa, Botswana, Namibia, Mauritius, and other nations as the crypto industry continues to grow. These concerns led to the committee's decision to provide BAK with two months to draft a cryptocurrency bill. The committee also urged BAK to focus on comprehensive public education efforts to demystify cryptocurrency trading.
In September 2023, Kenya introduced the Finance Bill 2023, which mandated cryptocurrency exchanges to withhold 3% of the value of a digital asset transferred or exchanged. This tax initiative prompted members of BAK to contest the tax in Kenya's High Court. Despite their efforts, they were unable to persuade lawmakers to reject the tax during a parliamentary session in May.
Kenyan authorities have taken a firm stance against Worldcoin, a controversial digital ID encryption project co-founded by Sam Altman, the CEO of OpenAI. A parliamentary committee in Kenya recommended that regulators shut down the project's operations in the country due to concerns over personal data collection.
