Kenya is considering a policy that would require crypto providers to establish local offices in an effort to enhance regulatory oversight.
Kenya is mulling a new policy that would require crypto businesses to open local offices, aiming to tighten oversight of the country’s fast-growing virtual asset industry, Bloomberg has learned, citing a draft law on the National Treasury’s website.
The proposed law would exclude businesses dealing with assets that can’t be traded, transferred, or used for payments outside a closed system. According to the document, the policy “seeks to close the gaps in the absence of a legal and regulatory framework for virtual assets and virtual asset service providers.” The proposal also aims to address issues like consumer protection, data privacy, and cybersecurity.
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Crypto adoption is on the rise in Kenya. Chainalysis, a New York-based blockchain forensic firm, ranks Kenya 28th out of 155 countries in its Global Cryptocurrency Adoption Index, noting that crypto is “undeniably transforming the financial landscape of the region, home to a number of high-ranking nations […].”
In 2023, Kenya introduced a 3% tax on crypto transactions. Still, the sector lacks clear regulations. If the draft law passes, crypto businesses operating in the country will be required to establish a local presence, giving the government a better way to monitor their activities. The draft law is open for public input, though it’s unclear when it will take effect.
Read more: Kenya preparing to legalize crypto: report
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