Key takeaways:
- Kenya may be the first nation in the world where industry members create the crypto regulatory framework.
- This is the first time a parliamentary committee has ordered a stakeholder organization or association to design a bill and present it to the legislature for approval.
Kenya may be the first nation in the world where industry members create the crypto regulatory framework.
The Departmental Committee on Finance and National Planning of the National Assembly has instructed the Blockchain Association of Kenya (BAK) to design the initial version of a bill that may eventually be enacted to regulate virtual asset service providers.
Representatives from BAK were invited by the Committee on Finance and National Planning to speak about the regulation of digital assets on October 31. Allan Kakai, the legal and policy director of BAK, gave the Mariblock local media the following information on the meeting:
“Basically, we are telling [the] parliament: ‘Look, Kenya has always branded itself as the Silicon Savannah; we are top three for digital assets [volume in Africa], and if we do not develop a clear licensing and regulatory framework, Nigeria, South Africa, Botswana, Namibia, Mauritius would take the lead, and the capital flow that would have come to Kenya would have flocked elsewhere.”
According to Kakai, this is the first time a parliamentary committee has ordered a stakeholder organization or association to design a bill and present it to the legislature for approval. He went on to say:
“This is very interesting because this has never happened with the Bank Association, this has never happened with the Fintech Association, this has never happened with the Digital Lenders Association, this has never happened with any association at all.”
The committee responded by giving the BAK two months to write the cryptocurrency bill. The committee just states that it “urged the association to undertake robust public education on cryptocurrency trade to demystify it” in the message posted on its official X (previously Twitter) account.
Kenya unveiled the Financial Act 2023 in September 2023, which mandates that cryptocurrency exchanges retain three percent of the digital asset’s transfer or exchange value.
The BAK filed a complaint against the proposed crypto tax with the Kenyan High Court after its members were unable to convince the MPs not to approve it during their meeting in May.
The CEO of OpenAI, Sam Altman, co-founded the contentious digital ID cryptocurrency project Worldcoin, which faced heavy criticism from Kenyan authorities. Citing worries over the project’s collection of personal data, a parliamentary committee in Kenya’s government suggested that authorities stop the project’s activities in the nation.
