Kenya Prepares to Legalize Cryptocurrencies in Policy Shift

Kenya’s Treasury Cabinet Secretary John Mbadi has said the country is preparing legislation to legalize cryptocurrencies, a shift from the government’s previous warnings against the industry.

"The emergence and growth of Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs) have given rise to innovations in the local and international financial system with dynamic opportunities and challenges," Mbadi said according to local news outlet/

Mbadi stressed a need for a regulatory framework to both capitalize on the potential benefits of the industry while mitigating the risks posed by money laundering, terrorism financing and fraud.

“The Government of Kenya is committed to creating the necessary legal and regulatory framework in order to leverage opportunities presented by VAs and VASPs while managing the reluctant risks,” Mbadi said.

Kenya launched a draft policy on virtual assets and virtual asset service providers in December. The draft policy aims to establish a “fair, competitive and stable market” for cryptocurrency industry players and foster innovation and financial literacy, Mbadi said.

Kenya has historically kept a cautious stance toward the cryptocurrency industry. In December 2015 the country’s central bank issued a public notice warning against cryptocurrency use, stating that these assets weren’t legal tender in the country and no entity was licensed to offer money remittance services using crypto in Kenya.