Kenya will become the first country to introduce a crypto bill spearheaded by industry experts in East Africa.
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Legislators Move To Regulate Crypto
The National Assembly’s Departmental Committee on Finance and National Planning has directed the Blockchain Association Of Kenya (BAK) to prepare the first draft of what could become a “virtual asset service provider’s bill.”
The legislative body summoned BAK representatives on Oct. 31 to discuss drafting a bill to regulate digital assets. The association announced the development via their x account on November 6.
What Inspired the Move?
In September 2023, Kenya passed a financial Act that introduced a 3% tax on crypto transfers and exchanges. The act requires exchanges to withhold 3% “of the transfer or exchange value of the digital asset.” This led the BAK members to file a complaint in the Kenyan high court after efforts to dissuade the lawmakers from passing the Act failed.
The move to create a robust regulatory framework came after lawmakers understood that Kenya risks losing capital inflows to other African countries with clear crypto regulatory frameworks.
BAK’s legal and policy director, Allan Kakai, emphasized that Kenya has always been the home to innovations and is amongst the top three countries with the highest crypto trading volume in Africa. He outlined the implications of not having a clear regulatory framework.
“Look, Kenya has always branded itself as the Silicon Savannah…if we do not develop a clear licensing and regulatory framework…the capital flow that would have come to Kenya would have flocked elsewhere.” —Alan Kakai.
The legislative committee responded by granting the Blockchain Association Of Kenya a two-month window to draft a crypto bill. The committee has encouraged the Association to conduct thorough public education on cryptocurrency trading and investing.