In a groundbreaking move, Kenya is poised to be the pioneer in empowering industry experts to shape the regulatory landscape for cryptocurrencies. The National Assembly’s Departmental Committee on Finance and National Planning has mandated the Blockchain Association of Kenya (BAK) to craft the initial version of what could potentially become a pivotal virtual asset service provider’s bill.

This development unfolded on October 31, when the Committee on Finance and National Planning invited representatives from BAK to engage in discussions about the regulation of digital assets. Allan Kakai, BAK’s legal and policy director, revealed insights from the meeting to local media outlet Mariblock. He emphasized the urgency, stating, “We are telling the parliament: ‘Look, Kenya has always branded itself as the Silicon Savannah; we are among the top three in Africa for digital asset volume. If we don’t establish a clear licensing and regulatory framework, countries like Nigeria, South Africa, Botswana, Namibia, Mauritius will take the lead, and the potential capital influx to Kenya will divert elsewhere.'”

In response to BAK’s concerns, the committee granted the association a two-month period to draft the comprehensive crypto legislation. The committee’s official communication, shared via its X (formerly Twitter) account, highlighted the need for the association to conduct extensive public education on cryptocurrency trading to demystify the concept.

This development comes after Kenya introduced the Financial Act 2023 in September, which included a provision requiring cryptocurrency exchanges to withhold 3% of the transfer or exchange value of digital assets. Despite BAK’s efforts to dissuade lawmakers from implementing this crypto tax during a meeting in May, the association filed a complaint against it in the High Court of Kenya.

Additionally, Kenyan authorities have taken a firm stance against the controversial digital ID crypto project Worldcoin, co-founded by Sam Altman, the CEO of OpenAI. A parliamentary committee in the Kenyan government recommended the shutdown of the project’s operations in the country, citing concerns about the harvesting of personal data.

These recent developments underscore Kenya’s proactive approach to shaping its cryptocurrency landscape, with industry experts at the forefront of designing the regulatory framework for the future of digital assets in the country.