Kenyan lobby group push new rules for regulating crypto firms

March 5, 2024
2 min read
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The news: 

  • The Blockchain Association of Kenya (BAK), a digital asset industry lobby group in Kenya, is advocating for new reforms to regulate how new players enter the market in collaboration with other stakeholders in the Kenyan digital assets and cryptocurrency space.
  • On February 14, 2014, the BAK was slated to submit the Virtual Asset Service Provider (VASP) bill to the National Assembly Committee on Finance. 
  • The bill proposes the establishment of a regulatory sandbox to verify and regulate crypto players before issuing them licences to operate in the East African country. 

Inside the VASP bill, BAK also seeks to ensure that businesses within the Kenyan digital asset industry can operate as commercial entities.

Recall that the Kenyan Parliament had tasked the BAK with drafting a framework to regulate the cryptocurrency market in response to the proliferation of dodgy crypto entities defrauding Kenyans of millions and the lack of measures to combat them. 

Michael Kimani, Chair of the Blockchain Association of Kenya, explained that the bill includes a licencing structure for how crypto entities will register in the country and a sandbox mechanism allowing businesses to conduct trials before receiving approval to operate. 

Kimani also noted that virtual currency businesses have been finding it difficult to get into the Capital Markets Authority (CMA) sandbox because of the zero framework. 

“What this draft bill is proposing is a joint regulatory sandbox that will involve CBK [Central Bank of Kenya], CMA and all other regulators where they can all take part jointly in approving some of these businesses coming into the sandbox,” Kimani added. 

The Cabinet Secretary is expected to officially announce the members of the Sandbox, which will include representatives from the Capital Markets Authority, the Central Bank of Kenya, and the Financial Reporting Centre. 

The sandbox will also include representatives appointed by the current Cabinet Secretary in charge of information and communication technology affairs, the Nairobi International Financial Centre, the Law Society of Kenya, the Kenya Competition Authority, and the Kenya Revenue Authority.

BAK extended the feedback period in response to concerns raised by new players, including government agencies and other stakeholders, about a provision in the first draft of the VASP bill.

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