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Kenya’s Treasury Secretary Mbadi, announces legal framework for cryptocurrencies.
Kenya’s Treasury Secretary Announces Start of Cryptocurrency Regulations
Kenya’s Treasury Secretary John Mbadi has announced that the country will begin working on legal regulations for cryptocurrencies and will establish a regulatory framework for the sector. This announcement marks a significant shift from the Kenyan government’s previously cautious approach.
In a statement to the local press, Mbadi highlighted that virtual assets (VAs) and virtual asset service providers (VASPs) have the potential to bring innovation to the financial system, but also present dynamic opportunities and risks.
Following rapid developments in the integration of cryptocurrencies into the financial system, the government appears keen on capitalizing on these opportunities while addressing potential risks such as money laundering and terrorism financing through new legal regulations.
Government Takes First Step Toward Cryptocurrency Regulation
In December 2024, the Kenyan government released a draft policy proposing a regulatory framework for virtual assets and the companies offering services related to these assets. The draft aims to help create a fair, competitive, and stable market, while also encouraging innovation and increasing financial literacy through various strategies.
Kenya’s approach to cryptocurrencies had been cautious in the past, similar to many other countries. In 2015, the Central Bank of Kenya announced that cryptocurrencies were not considered legal tender and that there were no licensed service providers for transactions involving these assets.
However, after a 2022 report from the United Nations revealed that approximately 8.5% of Kenyans owned cryptocurrencies, discussions about taxing digital currencies and reviewing regulations began.
This new regulatory process represents an important step for Kenya in the cryptocurrency market. These developments signal a significant milestone that investors and professionals in the industry are keenly watching.
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