Kenya preparing to legalize crypto: report

Kenyan Treasury Cabinet Secretary John Mbadi has announced plans for a draft policy aimed at regulating virtual assets and virtual asset service providers.

Speaking on Friday, Mbadi said the proposed framework aims to capitalize on the opportunities offered by cryptocurrencies while addressing relevant risks, including money laundering, terrorist financing and fraud, according to The Standard.

Mbadi said the Government of Kenya is committed to creating a legal and regulatory framework that will enable VAs and VASPs to enjoy the benefits.

In December, Kenya submitted a draft policy focused on regulating virtual assets and service providers in the cryptocurrency sector. According to Mbadi, the policy aims to develop a fair, competitive and stable market for industry participants while promoting innovation and financial literacy.

Mbadi also highlighted the global trend towards regulating cryptocurrencies, citing examples from Morocco, the United States and Russia.

Africa is home to a growing number of fintech unicorns offering payment solutions to the region’s largely unbanked population. Kenya’s framework will adopt flexible regulatory approaches to align with international standards and support this growth.

The Financial Action Task Force has called on Kenya to step up anti-money laundering efforts and strengthen measures against terrorist financing in 2024. The FATF placed Namibia on its watch list, removed Uganda and maintained strict scrutiny on Kenya, South Africa and Nigeria; this was a move that could impact Kenya’s trade and investment costs.

If adopted, the policy could position Kenya as a major player in digital finance by protecting consumers and ensuring compliance with global regulatory standards.