Kenya moves to legalize cryptocurrencies amid growing adoption

Kenya is set to legalize cryptocurrencies, marking a significant shift in government policy, Treasury Cabinet Secretary John Mbadi announced Friday. According to The Standard, this move follows widespread underground use of digital currencies despite their prohibition. Mbadi emphasized the need for a regulatory framework to address risks such as money laundering and terrorism financing while fostering innovation.

He highlighted the success of Kenya’s financial innovations like M-Pesa, positioning the country as a leader in mobile finance. The proposed regulations aim to create a secure environment for Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs) to operate responsibly. Kenya ranks third in crypto adoption in Sub-Saharan Africa, but the absence of clear guidelines has raised concerns over misuse.

A recent IMF report recommended stronger regulations to mitigate risks and align with global standards. The government sees legalizing cryptocurrencies as a way to enhance financial inclusion and economic growth. This development underscores Kenya’s commitment to remaining at the forefront of digital finance in Africa.