The Departmental Committee on Finance and National Planning of the National Assembly has instructed the Blockchain Association of Kenya to create a preliminary version of a proposed bill for virtual asset service providers. Blockchain Association Kenya Crypto Bill
In September, the Blockchain Association of Kenya (BAK), an industry advocacy group, made history by suing the national government to challenge the lawfulness of the digital asset tax.
Two months have passed since then, and the group has achieved yet another significant milestone. The Departmental Committee on Finance and National Planning of the National Assembly has requested that BAK produce a preliminary proposal to govern crypto assets.
In 2023, BAK made their second appearance before the National Assembly Committee on Finance and National Planning on October 31st to address digital asset regulation in the East African nation. Their initial appearance before the Committee was in May to contest, though without success, the inclusion of the digital asset tax (DAT) provision in Kenya’s Finance Act, 2023.
The urgency for cryptocurrency regulations has been heightened by three major events that occurred between May and October. Consequently, the Kenyan parliament has sought the assistance of BAK to comprehend digital assets and establish regulatory measures.
The launch of the decentralized identity (DID) project Worldcoin took place in various nations, notably Kenya and Uganda. Public outrage arose due to privacy issues, prompting a parliamentary inquiry that ceased the project’s operations in Kenya.
During the inquiry, lawmakers established an impromptu committee to investigate Worldcoin’s activities. The committee’s concluding report issued a primary suggestion that the country establish a regulatory system for digital assets within half a year of its acceptance into the National Assembly.
The Financial Act 2023 in Kenya came into operation on September 1, and introduced the contentious digital asset tax that mandates cryptocurrency exchanges to retain 3% “of the transfer or exchange value of the digital asset.” Following this, BAK has filed a plea with the High Court of Kenya to contest the digital asset tax.
At the G20 summit held in Morocco, the bloc took into account a synthesis paper released by the International Monetary Fund (IMF) and the Financial Stability Board (FSB) that pertained to digital assets. The synthesis paper cautioned regulators against implementing widespread prohibitions on cryptocurrency assets. Instead, it suggested that regulators create detailed and all-encompassing policies to address this emerging asset category.
Based on those three backgrounds, the Committee had grounds to summon us again,” BAK’s legal and policy director, Allan Kakai, told Mariblock.
We got a call from parliament, [saying] yes, we’re interested in learning and exploring what digital asset space has to offer; what are the policy challenges you are facing, and how can we work together to regulate this space?
The workshop was attended by delegates from BAK, Binance, Yellow Card, Kotani Pay, and the Law Society of Kenya.
Source: Mariblock Blockchain Association Kenya Crypto Bill