Kenya is moving towards legalizing cryptocurrencies, according to Treasury Cabinet Secretary John Mbadi. This marks a significant change from the government’s earlier warnings about the crypto industry. Mbadi highlighted the rise of Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs), which present both opportunities and challenges in the financial system.
He emphasized the importance of creating a regulatory framework to harness the benefits of cryptocurrencies while addressing risks like money laundering, terrorism financing, and fraud. The Kenyan government aims to establish laws that will support the growth of the crypto sector while ensuring safety and compliance.
In December, Kenya introduced a draft policy focused on virtual assets and service providers. This policy aims to create a fair and competitive market for cryptocurrency businesses and promote innovation and financial literacy among the public.
Historically, Kenya has been cautious about cryptocurrencies. In 2015, the central bank warned citizens against using crypto, stating they were not recognized as legal tender and that no licensed entities could offer crypto-related money remittance services.
However, by 2022, the situation began to change as lawmakers considered implementing a tax on cryptocurrencies due to the industry’s growth. A United Nations report indicated that around 8.5% of Kenyans owned cryptocurrencies, reflecting a rising interest in the digital asset space.
