The Blockchain Association of Kenya (BAK) is taking the lead in drafting Kenya’s first blockchain legislation.
The association has engaged with the National Assembly Committee on Finance and National Planning to discuss how to regulate digital assets effectively in the country. This move comes in response to recent developments in the blockchain and cryptocurrency sector.
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Collaboration with National Assembly
According to reports from local media, the National Assembly Committee on Finance and National Planning has expressed interest in understanding and exploring the digital asset space. The committee is looking to address the policy challenges in the sector and collaborate on regulatory efforts. As a result, BAK has been given the green light to draft the initial bill. The legislative committee has granted them a two-month timeline to prepare the draft.
Promoting Investment and Education
In addition to drafting the legislation, BAK is also committed to boosting investment and expanding education in the web3 space. The legislative committee noted that Kenya ranks third in terms of African adoption of digital assets, with over $20 billion in transactions and a thriving ecosystem.
Allan Kakai, the legal and policy director of BAK, highlighted Kenya’s significant presence in the digital asset space. He emphasized the importance of developing clear licensing and regulatory frameworks to ensure Kenya’s competitiveness in the region.
Kenya’s Milestone in Crypto Regulation
One noteworthy achievement of these discussions is the unique approach to drafting industry regulations. Instead of parliament creating the law independently, the blockchain association has been entrusted with the responsibility to draft the bill. This approach is a significant departure from traditional legislative processes and could make Kenya the first country to pass crypto regulations through industry leaders. While many in the crypto community view this as a positive development, regulators may have concerns about delegating their powers.
Scope of the Regulations
The proposed regulations will cover various aspects of the digital asset space, including taxation, licensing, consumer protection, and the establishment of a regulatory sandbox. The Blockchain Association has previously engaged with parliament regarding opposition to the digital asset tax regime.
This initiative follows Kenya’s suspension of the World Coin project and the enactment of the Finance Act. Additionally, the G20, the Financial Stability Board (FSB), and the International Monetary Fund (IMF) have adopted a synthesis paper on digital assets, further emphasizing the need for clear regulations in the sector.
The collaboration between the Blockchain Association of Kenya and the National Assembly Committee on Finance and National Planning is expected to pave the way for comprehensive regulations that will shape the digital asset landscape in the country. As Kenya continues to position itself as a prominent player in the digital asset market, these regulations will play a crucial role in providing clarity and promoting investor confidence in the sector.