Kenyan lawmakers are currently embarking on a groundbreaking initiative, signaling a remarkable shift in their approach to the world of cryptocurrency and blockchain technology.
This transformative endeavor sees them collaborating with the Blockchain Association of Kenya (BAK) to craft an all-encompassing regulatory framework for the crypto sphere, which could potentially position Kenya as a trailblazing nation in the global crypto regulatory landscape.
This pioneering journey is poised to reshape the way countries across the world handle cryptocurrency regulations and could have far-reaching implications for the digital asset industry.
The origin of this groundbreaking collaboration dates back to October 31, a pivotal day when the Departmental Committee on Finance and National Planning of the National Assembly warmly invited representatives from BAK. In the course of these conversations, Allan Kakai, BAK’s director of legal and policy, provided valuable insights into Kenya’s distinctive role within the digital asset ecosystem.
He highlighted Kenya’s renowned reputation as “Silicon Savannah” and proudly mentioned its position among the top three nations in Africa in digital asset trading volume. Kakai emphasized the critical need for a clear and comprehensive licensing and regulatory framework. He expressed concerns that the absence of such regulations could lead other African nations, including Mauritius, Botswana, Namibia, Nigeria, and South Africa, to seize the opportunity, redirecting capital flows that could have otherwise contributed to Kenya’s prosperity.
In response to the urgent need to address this pressing challenge, the committee gave BAK a critical two-month window to meticulously craft a comprehensive cryptocurrency bill. In their official communication, conveyed through various channels, including their Twitter account, the committee highlighted the importance of not only crafting sound regulations but also conducting robust public education campaigns to enlighten citizens about cryptocurrency trading. This educational component is instrumental in dispelling any misconceptions and fostering a more informed public that can make sound decisions in the digital asset space.
Kenyan Lawmakers Clash with BAK Over Cryptocurrency Tax
This groundbreaking partnership between Kenyan lawmakers and the Blockchain Association of Kenya is unfolding against the backdrop of the recently introduced Financial Act 2023. This act introduced a 3% withholding tax on the transfer or exchange value of digital assets on cryptocurrency exchanges, a move that stirred considerable controversy.
It’s worth noting that BAK had previously made efforts to dissuade lawmakers from implementing this crypto tax. However, despite their efforts, the tax was passed in May, prompting the association to take formal legal action by filing a complaint with the High Court of Kenya.
In addition to their efforts on the taxation front, Kenyan authorities have also displayed a stern approach towards the contentious digital identity (ID) crypto project known as Worldcoin. This project, co-founded by Sam Altman, the CEO of OpenAI, has faced strong opposition from a parliamentary committee within the Kenyan government. This committee has recommended the cessation of Worldcoin’s operations in the country, citing grave concerns related to personal data harvesting and the associated risks.