Kenya’s Treasury Secretary John Mbadi said the country was preparing legislation to legalize cryptocurrencies, a change from the government’s previous warnings against the industry.
“The emergence and growth of virtual assets (VAs) and virtual asset service providers (VASPs) have given rise to innovations in the local and international financial system with dynamic opportunities and challenges,” said Mbadi according to local media The Standard.
Mbadi stressed the need for a regulatory framework to both capitalize on the potential benefits of the industry while mitigating the risks posed by money laundering, terrorist financing and fraud.
“The Government of Kenya is committed to creating the necessary legal and regulatory framework in order to take advantage of the opportunities presented by AVs and VASPs while managing reluctant risks,” Mbadi said.
Kenya launched a draft policy on virtual assets and virtual asset service providers in December. The draft policy aims to establish a “fair, competitive and stable market” for players in the cryptocurrency sector and foster innovation and financial literacy, Mbadi said.
Kenya has always taken a cautious stance towards the cryptocurrency sector. In December 2015, the country’s central bank issued a public notice warning against the use of cryptocurrency, stating that these assets were not legal tender in the country and that no entity was authorized to offer money transfer services using cryptocurrency in Kenya.
Fast forward to 2022 and the country’s lawmakers began to consider whether to move forward with a law to tax crypto as the industry continued to grow in the country. A United Nations report at the time showed that around 8.5% of Kenyans owned cryptocurrencies.
CoinDesk did not receive a response from the Kenya Treasury before publication time.
