In a landmark development, the Blockchain Association of Kenya (BAK), a staunch advocate for digital asset policies, has taken the initiative to draft Kenya’s inaugural Virtual Assets Service Provider (VASP) bill.
Just about three months ago, during their initial meeting on October 31, 2023, Kenya’s parliament tasked a community-based NGO with creating the first draft of a crypto bill. The deadline for submission was set for February 14. Responding promptly, the BAK not only met but exceeded expectations by publishing the VASP bill well ahead of the schedule.
Divided opinions
The move has sparked diverse reactions within Kenya’s digital asset community, with opinions on the bill ranging from positive to negative. The proactive approach taken by the lobby group showcases its commitment to shaping the regulatory landscape for cryptocurrencies in the country.
Notably, the lobbying effort dates back to August 2023 when the BAK engaged with Kenya’s National Assembly Committee on Finance and National Planning. Their primary grievance was against the Digital Asset Tax (DAT) provision within the country’s Finance Act, 2023.
Kenya stands out globally in terms of its crypto economy, securing the third position after Nigeria and South Africa based on Chainalysis’s cryptocurrency transaction data spanning July 2022 to June 2023. Despite this, the nation faced challenges such as fraud, formidable entry barriers for cryptocurrency startups, and restrictive tax policies, hindering the growth of its crypto market.
Providing customer protection framework
Addressing these issues, the proposed cryptocurrency bill seeks to establish a robust consumer protection framework. By doing so, it aims to alleviate concerns related to fraud and create a more favorable environment for the development of cryptocurrency startups in Kenya. As the bill undergoes public review, its potential impact on the country’s digital asset landscape remains a focal point of interest.
