Kenya Proposes New Laws to Govern Cryptocurrencies

Kenya plans to regulate cryptocurrencies, signaling a major policy shift. Treasury Cabinet Secretary John Mbadi announced the government’s commitment to creating a legal framework. This change moves away from the Central Bank of Kenya's past warnings against digital currencies.

Draft Policy Aims for a Safer Crypto Market

The draft proposal, “National Policy on Virtual Assets and Virtual Asset Service Providers,” focuses on fairness and safety. The policy aims to establish a competitive and stable market for virtual currencies.

Key goals include protecting consumers, combating money laundering, and addressing terrorism financing risks. The policy also emphasizes creating clear standards for cryptocurrency activities and service providers. 

Public feedback is welcomed until January 24, highlighting the government’s collaborative approach. If approved, the regulations could make Kenya a leader in African cryptocurrency adoption. South Africa and Nigeria have already established similar frameworks.

Kenya’s Crypto Adoption Grows Rapidly

Kenya ranks 21st globally for cryptocurrency adoption, according to a Chainalysis report. Stablecoins drive much of the trading activity, partly due to currency devaluation.

Between July 2023 and July 2024, Kenyans traded $3.3 billion in stablecoins. 

This volume shows growing trust in digital currencies despite previous warnings. The proposed laws could attract innovation and investment while addressing risks. 

By regulating virtual currencies, Kenya is positioning itself as a regional leader in the digital economy. This bold step marks a new chapter in Kenya’s financial journey.