Kenya Moves to Legalize Bitcoin and Cryptocurrency Trading

Kenya is taking significant steps toward legalizing cryptocurrency trading, including Bitcoin, marking a major policy shift in the country. Treasury Cabinet Secretary John Mbadi has confirmed that the government is drafting legislation to regulate crypto assets and promote a stable environment for their use.

“The emergence and growth of Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs) have created opportunities and challenges within the financial system,” Mbadi said, as reported by The Standard, a local news outlet. He emphasized the government’s aim to leverage the potential benefits of cryptocurrencies while addressing associated risks such as fraud, money laundering, and terrorism financing.

“The Government of Kenya is committed to establishing a robust legal and regulatory framework to harness the opportunities presented by VAs and VASPs while mitigating risks,” Mbadi added. A draft policy for crypto regulation, first introduced in December, is under review. The proposed legislation aims to create a “fair, competitive, and stable market” for cryptocurrency traders in the country.

A Reversal of Kenya’s Crypto Ban?

This development represents a significant turnaround for Kenya, which had previously taken a cautious stance on cryptocurrency. In 2015, the Central Bank of Kenya issued a public notice warning against the use of cryptocurrencies and prohibited their use as legal tender. The country has since refrained from licensing any crypto exchanges or services.

Despite this, a 2022 UN report revealed that nearly 10% of Kenyan citizens held cryptocurrency, reflecting growing public interest and adoption. This grassroots momentum appears to have influenced policymakers to reconsider their stance and explore regulatory frameworks for the industry.

Kenya Joins the African Crypto Movement

If the legislation passes, Kenya will join other African nations such as South Africa and the Central African Republic in legalizing cryptocurrency. This move positions Kenya as a potential trailblazer in the East African region and could encourage other countries to follow suit.

With Bitcoin and other cryptocurrencies experiencing record growth globally, Kenya’s decision to regulate and legalize crypto trading could unlock new economic opportunities and innovation within the financial sector.