Kenya is one of the leading countries in the African continent when it comes to crypto adoption, and the UNCTAD has ranked the country fifth worldwide in adoption. According to the report, 8.5% of the Kenyan population owns cryptocurrency, compared to 8.3% of the U.S. population. According to Rufas Kamau, a researcher and market analyst, Kenya is a promising market for cryptocurrency.
Cryptocurrency is not yet classified as a security
While Kenyan regulators have not yet categorized cryptocurrencies as a security, they have issued public warnings about the risks of investing in and trading cryptocurrencies. These warnings stressed that cryptocurrencies are highly volatile and lack specific regulation. They also cautioned the public to refrain from trading in cryptocurrencies unless they are registered with a Kenyan bank. However, Kenyan regulators do not intend to ban the trading of cryptocurrencies. Cryptocurrencies in Kenya are now worth over $1.5 billion dollars, which is about 2.3% of the country’s GDP.
Although Kenyan regulators have not classified cryptocurrency as a security, there are some steps that the government can take to make the process as smooth as possible. One of these steps is to develop a common approach to cryptocurrency regulation. This will help create uniformity across the legal framework. Another step would be to create a primary cryptocurrency regulator.
It is not yet regulated
The cryptocurrency market in Kenya has seen an increase in adoption but it is still unregulated. Kenya’s Treasury Secretary has been asked to investigate the market and determine whether or not it needs to be regulated. The government has given him two weeks to submit his report. A cryptocurrency exchange in the country can’t operate until it is licensed by the Kenyan government.
However, cryptocurrency users in the country have not waited for a regulated market to emerge. The adoption of cryptocurrency in the country is growing rapidly, partly fueled by homegrown exchanges that operate in the gray area.
It is growing without regulations
Cryptocurrencies are growing in popularity in Kenya despite the fact that the country is lacking in regulations. Cryptocurrency exchanges are unregulated and are not backed by the government or the Central Bank of Kenya. Experts believe this is hampering the growth of digital money in Kenya. They hope that Kenya will someday catch up with countries like South Africa and develop appropriate regulations to protect all participants.
While Kenya has adopted global anti-money laundering and counter-terrorism regulations, it still has not adopted any specific regulations for its cryptocurrency exchanges and digital wallets. This is despite the fact that it is a member of the Financial Action Task Force, the Eastern and Southern African Money Laundering Group, and the International Organization of Securities Commissions. As of now, Kenya does not have any specific regulations for cryptocurrency exchanges and digital wallets, although it is committed to monitoring the market and ensuring the protection of its citizens.
It is a digital marketplace
Kenya has adopted global anti-money laundering and counter-terrorism regulations. It is a member of the Financial Action Task Force (FATF) under the Eastern and Southern Africa Money Laundering Group and of the International Organization of Securities Commissions (IOSC). Kenya has imposed KYC regulations for transactions involving more than $10,000. For transactions above that amount, the respective banks must approve the transactions. In addition, fintech services must report suspicious activities.
Kenya’s Central Bank has warned Kenyans not to trade cryptocurrencies due to their volatility and lack of specific regulation. However, this has not stopped Kenyans from buying and selling cryptocurrencies. In fact, Kenyans currently hold $1.5 billion in Bitcoin, which is equivalent to 2.3% of the country’s GDP.
It is a potential way to boost financial inclusion in Kenya
The crypto-currency market has the potential to bridge the financial gap between Kenyans and more traditional financial institutions. It allows Kenyans to move their money more easily and quickly both locally and globally. In Kenya, a large portion of the population is still without access to formal financial services.
Kenya has the ability to create a flexible regulatory framework that will serve all citizens’ needs and make financial inclusion a reality. The country can develop an efficient payment system for its citizens and make micro-work more viable. It will also be able to introduce digital payments and ensure that the government’s goal of universal financial inclusion is achieved.
Kenya is well-positioned to leapfrog its peers in digital labor and cryptocurrency but needs to strike a delicate regulatory balance. Too much regulation can create a shadow digital economy. Policymakers will have to decide whether to reinforce the current systems that exclude millions of people or to actively create a safe, ethical path to universal inclusion.