Kenyan lobby group takes the first-ever crypto bill of the country to parliament. Digital asset policy advocate, Blockchain Association of Kenya (BAK), has reportedly drafted the first-ever Virtual Assets Service Provider (VASP) bill in a bid to regulate the digital asset market in the country.
Kenyan First-Ever Crypto Bill
In August 2023, the Blockchain Association of Kenya (BAK) made its case to Kenya’s National Assembly Committee on Finance and National Planning, expressing its concerns over the Digital Asset Tax (DAT) outlined in the country’s Finance Act, 2023. This move underscores the growing significance of the cryptocurrency economy in Kenya, which, according to Chainalysis’s data from July 2022 to June 2023, ranks as the third-largest in Africa, following Nigeria and South Africa, and 21st globally in terms of crypto adoption.
The Kenyan crypto market, however, faces several challenges, including fraud, high barriers to entry for startups, and restrictive tax regulations, which have raised consumer protection concerns. In response, BAK has proposed a cryptocurrency bill aimed at establishing a comprehensive consumer protection framework, implementing operator licensing requirements within a regulatory sandbox, and introducing anti-money laundering and counter-terrorism financing (AML/CTF) measures to mitigate industry and regulator apprehensions.
Blockchain Association of Kenya’s Influence Behind This Bill
BAK has called upon local, African, and international stakeholders to review and provide feedback on the cryptocurrency bill by February 7, 2024. Following this collaborative review, the lobby group plans to refine the bill based on the received input, leading to the submission of a second draft to the National Assembly’s Departmental Committee on Finance and National Planning on February 14, 2023.
Michael Kimani, the Founder and Chairman of BAK, highlighted the bill’s potential to transform Kenya into a leading digital asset hub, comparable to renowned global centers like Singapore and Dubai. This initiative is part of a broader movement across Africa, where countries like Nigeria and South Africa are already advancing regulatory frameworks to govern their digital asset markets. BAK’s proposed legislation aims not only to provide consumer protection but also to unlock the tax revenue opportunities inherent in the crypto market.
The Significant Economic Prospects of Digital Assets and Blockchain Technology
Paul Gachora, BAK’s co-founder and CEO, emphasized the significant economic prospects that digital assets and blockchain technology offer the Kenyan government, particularly as it seeks to achieve its economic recovery objectives. The successful passage and implementation of BAK’s proposed bill could mark a pivotal moment for Kenya, potentially setting a precedent for cryptocurrency regulation across the African continent.
“Our goal is to help Kenya raise $1 billion in foreign direct investments to various sectors as outlined in Kenya’s medium-term economic plan by 2027,” Gachora said.
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