The Blockchain Association of Kenya (BAK) recently released the country’s first draft Virtual Assets Service Provider (VASP) Bill for Kenya’s digital asset market.
The move comes three months after Kenyan MPs directed the industry lobby group to draft a bill to regulate cryptocurrency in the country.
BMA understands that Kenya’s digital asset industry has been plagued by consumer protection concerns such as fraud, barriers to entry for digital asset startups and businesses, and a demanding tax regime on digital assets.
The draft bill addresses industry, consumer, and regulator concerns by proposing a licencing framework, a consumer protection framework, anti-money laundering and counter-terrorism financing (AML/CTF) provisions, and a regulatory sandbox.
BAK is inviting all stakeholders affected by the bill from Kenya, Africa, and the rest of the world to review, comment and offer feedback.
After which, BAK will revise and incorporate feedback into the next iteration of the bill and deliver it to the National Assembly’s Departmental Committee on Finance and National Planning by February 14th, the same committee that tasked the association to develop the draft bill.
Michael Kimani, founder and BAK chairman, said, “Since our organisation was founded in 2017, we have dreamt of seeing Kenya elevate its status to a digital asset hub alongside other jurisdictions like Singapore and Dubai. The draft bill is a significant step in realising our vision.”
Regulation of digital assets has been a contentious topic in recent years, with developed nations such as the United States, Hong Kong, and Singapore setting the tone for reining in an industry that mainstream financial regulators regard as the Wild West.
In Africa, countries such as Nigeria and South Africa have already implemented legislation to govern the industry, which is viewed as facilitating capital flight and giving opportunities for illegal activities such as money laundering.
If passed, the proposed bill by BAK will significantly increase tax income for Kenya’s National Treasury.
