The Blockchain Association of Kenya (BAK) is set to launch Kenya's first-ever community-led Virtual Assets Service Provider (VASP) draft Bill for the country's digital asset industry.
The Bill which was published on January 22, 2024, is available for public review and has garnered an overwhelming number of contributions, feedback and critique from the lobby group’s digital asset community.
The VASP Bill comes three months after legislators mandated the community-born industry lobby group to develop a draft bill to regulate crypto assets in the country.
BAK Founder and Chairman Michael Kimani said the Bill is a significant step in realising their vision of having a digital asset hub like other developed countries.
“Since our organisation was founded in 2017, we have dreamt to see Kenya elevate its status to a digital asset hub, alongside other jurisdictions like Singapore and Dubai," Kimani said.
The Bill, he said, addresses the industry, consumer and regulator concerns by proposing a licensing framework, consumer protection framework, Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) and a regulatory sandbox.
BAK said it invites all stakeholders affected by the bill from Kenya, Africa and the rest of the world to review, comment and offer feedback by 7, February.
BAK will revise and incorporate feedback into the next iteration of the Bill and deliver it to the National Assembly’s Departmental Committee on Finance and National Planning by February 14.
BAK Director of Public Policy and Regulatory Affairs Allan Kakai called for collaboration between legal professionals, regulatory authorities, and players in the Virtual Assets industry.
"Through this, we can navigate the regulatory challenges of digital assets more effectively and pave the way for innovation and growth in the blockchain ecosystem,” Kakai said.
BAK CEO and Co-founder Paul Gachora said digital assets and blockchain present an opportunity for the Kenyan Government to tap into new ways of fundraising investment in the country.
"Our goal is to help Kenya raise $1 billion in foreign direct investments to various sectors as outlined in Kenya's medium-term economic plan by 2027,” Gachora said.
"The draft Virtual Assets Service Provider Bill is the culmination of months of collaborative work that started in April 2023."
Regulation of digital assets has been a contentious topic in the last year with developed countries such as the United States, Hong Kong and Singapore setting the tone for reining in an industry perceived as wild west by mainstream financial regulators.
In Africa, countries like Nigeria and South Africa have already put in place regulations to manage the industry which is seen as enabling capital flight and providing avenues for criminal activity such as money laundering.
The draft VASP Bill will put Kenya on the map as a digital asset hub. If passed, the bill will see an inflow of tax revenues into the coffers of Kenya’s National Treasury.
Everyone affected by the Draft VASP Bill is encouraged to share feedback on the bill and stay tuned for ongoing development.
The next milestone on the digital asset policy is to develop a report to accompany the bill to parliament for passing, as well as a pilot to demonstrate the potential of digital assets and blockchain to support Kenya’s economic recovery.