Kenya‘s parliament has approved a new law aimed at overseeing virtual assets, including cryptocurrencies, according to a key legislator. The goal is to foster greater investment in this burgeoning field by establishing transparent guidelines.
The Virtual Asset Service Providers Bill was passed by lawmakers last week, as announced by Kuria Kimani, who leads the finance committee in the National Assembly. This step addresses ongoing concerns about the absence of robust oversight in the digital asset space.
With this development, Kenya is poised to become one of the few African countries, alongside nations like South Africa, to have dedicated regulations for the cryptocurrency industry. The bill now awaits the signature of President William Ruto to become official.
Under the new framework, the central bank will handle licensing for stablecoins and similar virtual assets, while the capital markets authority will oversee approvals for cryptocurrency exchanges and trading platforms.
This initiative arrives amid global preparations for an anticipated surge in stablecoins tied to the U.S. dollar, which international regulators have cautioned could pose risks to the currencies of developing economies.
Kimani expressed optimism that the regulatory certainty will draw more funding into Kenya’s fintech landscape, potentially from major players like Binance and Coinbase. He referenced prior discussions between these companies and Kenyan officials.
“Kenya could position itself as Africa’s entry point for digital assets,” Kimani noted. He highlighted that a significant portion of young adults aged 18 to 35 are already engaging with virtual currencies for trading, payments, investments, and business transactions.
While the global digital asset market has expanded rapidly over the past ten years, regulatory challenges persist, particularly in curbing exploitation by criminals who leverage the technology’s anonymity.
The Kenyan legislation draws inspiration from regulatory models in places like the United States and the United Kingdom, according to Kimani.
Kenya has long been a leader in mobile financial innovations, exemplified by M-Pesa from Safaricom, which serves millions with features for transfers, savings, and investments.
