Kenya’s Treasury Cabinet Secretary, John Mbadi, has unveiled plans for a draft policy regulating virtual assets (VAs) and virtual asset service providers (VASPs). The initiative seeks to harness the potential of cryptocurrencies while mitigating risks such as money laundering, terrorism financing, and fraud, according to The Standard.
Mbadi emphasized the government’s commitment to developing a legal framework that encourages innovation in the virtual asset space while ensuring market stability and consumer protection. The proposed policy, introduced in December, aims to create a fair and competitive environment for the cryptocurrency sector by promoting innovation and financial literacy.
Concerning global regulatory trends, Mbadi cited countries like Morocco, the United States, and Russia as examples of nations working to establish cryptocurrency oversight. Kenya plans to adopt a flexible regulatory approach to align with international standards and foster the growth of fintech companies across the region.
Africa is witnessing a surge in fintech innovation, with numerous unicorns offering payment solutions to the continent’s largely unbanked population. Kenya’s policy aims to support this growth while safeguarding financial systems from misuse.
In 2024, the Financial Action Task Force (FATF) urged Kenya to enhance its anti-money laundering measures and strengthen defenses against terrorism financing. Kenya remains under heightened scrutiny by the FATF, which could affect its trade and investment climate.
If adopted, the proposed policy would position Kenya as a key player in digital finance by promoting compliance with global regulatory standards and protecting consumers in the evolving crypto landscape.
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