In a major policy reversal, Kenya has announced plans to legalize and regulate cryptocurrency trading, including Bitcoin. Treasury Cabinet Secretary John Mbadi revealed that the government is preparing legislation to oversee virtual assets and service providers in the country.
This marks a dramatic shift from Kenya's previous stance, when in 2015 the Central Bank issued warnings against cryptocurrency use and banned it as legal tender. The change comes after a 2022 UN report showed that approximately 10% of Kenya's population already owns cryptocurrencies despite the restrictions.
"The Government of Kenya is committed to creating the necessary legal and regulatory framework to leverage opportunities presented by virtual assets while managing the inherent risks," stated Mbadi. The proposed regulations aim to establish a balanced and competitive market for cryptocurrency traders while addressing concerns around fraud, money laundering, and terrorism financing.
Kenya introduced an initial draft policy on cryptocurrency regulation in December, which remains under review. Once implemented, Kenya will join other African nations like South Africa and the Central African Republic that have already legalized cryptocurrency operations.
The move reflects growing recognition of digital currencies' role in modern finance, as Kenya seeks to harness the technology's potential while implementing appropriate safeguards. The legislation will provide clarity for cryptocurrency businesses and users operating in East Africa's largest economy.