- The Blockchain Association of Kenya has drafted the country’s first Virtual Assets Service Provider (VASP) bill to regulate the digital asset market, marking a significant milestone in Kenya’s crypto landscape.
- This groundbreaking initiative aims to address consumer protection concerns and position Kenya as a global digital asset hub while inviting stakeholder input for a collaborative approach to policymaking.
In a bold move toward regulating the burgeoning digital asset market, the Blockchain Association of Kenya (BAK) has taken the initiative to draft the country’s inaugural Virtual Assets Service Provider (VASP) bill. This landmark bill, unveiled on January 22, 2024, marks a significant step in formalizing Kenya’s stance on cryptocurrency and blockchain technology.
Kenya Enters the Crypto Conversation
Kenya’s foray into cryptocurrency legislation follows a proactive approach by its parliament, which had earlier tasked community-based organizations with crafting a comprehensive crypto bill. Prompted by concerns raised during the first meeting on October 31, 2023, this directive aimed to establish a regulatory framework aligned with global standards.
The move comes at a pivotal time for Kenya, as data from Chainalysis reveals the country’s substantial presence in the crypto economy, ranking third in Africa behind Nigeria and South Africa. Despite this, Kenya faces challenges such as fraud and restrictive tax policies, hindering the market’s full potential.
A Bill for Consumer Protection and Economic Growth
The proposed VASP bill seeks to address these challenges by prioritizing consumer protection and industry growth. Through operator licensing requirements and provisions for anti-money laundering and counter-terrorism financing (AML/CTF), the bill aims to instill confidence in both consumers and regulators.
Founder and Chairman of BAK, Michael Kimani, expressed optimism about the bill’s potential to position Kenya as a global digital asset hub, akin to leading financial centers like Singapore and Dubai. Moreover, the bill aligns with Kenya’s economic recovery goals, with BAK’s CEO, Paul Gachora, emphasizing the substantial foreign investment opportunities it could unlock.
A Call for Collaborative Action
As the bill undergoes public review, BAK invites stakeholders from Kenya, Africa, and beyond to contribute their insights. This collaborative approach underscores the importance of inclusive policymaking in shaping Kenya’s crypto landscape.
Following the review process, BAK plans to refine the bill based on feedback before submitting it to Kenya’s National Assembly. If passed, the bill could not only propel Kenya into the forefront of crypto regulation in Africa but also serve as a blueprint for other nations navigating similar waters.
Kenya’s venture into cryptocurrency regulation reflects a progressive mindset aimed at fostering innovation while safeguarding consumer interests. By pioneering legislative frameworks tailored to its unique context, Kenya has the opportunity to harness the transformative power of blockchain technology for sustainable economic growth. As stakeholders engage in dialogue and deliberation, the path toward a vibrant and regulated crypto ecosystem in Kenya appears more promising than ever.
