Kenya’s National Treasury has initiated public consultations on a bill and policy to regulate cryptocurrencies and virtual asset companies like crypto exchanges. This significant step comes as the International Monetary Fund (IMF) warns that Kenya is lagging in regulating its growing crypto industry.
Addressing a Legal Grey Area
The proposed legislation aims to address the current lack of clarity that has hindered banks and financial institutions from engaging with cryptocurrencies. This legal grey area has limited the formal participation of institutions in the crypto ecosystem and left the burgeoning market largely unregulated.
If enacted, the framework could:
- Provide oversight for virtual asset companies like Binance, which currently operate without formal regulatory approval.
- Foster bank participation by clarifying the relationship between traditional finance and the crypto sector.
- Protect users from fraud and financial risks, a concern amplified by the absence of regulatory safeguards.
A Response to the IMF’s Recommendations
The IMF has repeatedly urged Kenya to establish a clear regulatory framework for virtual assets, citing concerns