Kenya To Introduce Cryptocurrency Regulation

Kenya To Introduce Cryptocurrency Regulation

Kenya is currently working on creating new laws that will regulate the trading of cryptocurrencies. This decision has been made due to concerns that the unregulated nature of digital currencies may facilitate money laundering and provide opportunities for terrorist financing. A working group is currently developing a policy document to form the basis for the legal framework intended to govern digital asset providers. Once the proposal is completed, it will be presented to the Cabinet for approval.

Kenya is associated with the Financial Action Task Force (FATF) through the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG). As an associate member of FATF, ESAAMLG requires each country to establish a Financial Intelligence Unit. In Kenya, this unit is the Financial Reporting Centre (FRC).

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A 2021 report by the task force on the national risk assessment on money laundering and terrorism financing stated that the country’s vulnerability to money laundering and terrorism financing has increased due to geo-positioning, trade inter-connectedness, and high fintech use.

The financial sector in Kenya has undergone significant developments, including mobile money banking, online betting, digital credit, online foreign exchange trading, and the use of cryptocurrencies. These developments have rendered traditional financial sector regulations insufficient in maintaining the integrity of financial transactions.

FATF recommended actions based on identified deficiencies and gave Kenya a 12-month deadline to address them. The country concluded its observation period in October last year and filed a post-observation report in November.

Source: Business Daily Africa

Cover photo by Kanchanara on Unsplash

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