Kenya Ministry of Finance Estimates Crypto Regulations Will Require Approximately $14 Million

Kenya will require KES 1.82 billion (~$14 million) to introduce regulations for the use of cryptocurrency and digital tokens in the country, the Ministry of Finance says.

Kenya is determined to regulate crypto assets as part of its efforts to modernize anti-money laundering and counter-terrorism financing strategies, aiming to be removed from the Financial Action Task Force (FATF) grey list, which identifies countries at risk of money laundering.

🇰🇪 REGULATION | Kenya Seeks Crypto Regulation to Avoid FATF ‘Grey List’

Interestingly, BitKE has consistently highlighted previous greylistings as being related to a lack of crypto regulation in South Africa🇿🇦, Nigeria 🇳🇬, and Botswana 🇧🇼. Soon after passing virtual assets… pic.com/23h1lEHWgv

— BitKE (@BitcoinKE) February 20, 2024

According to a first draft of the regulations:

The ministry has allocated KES 800 million ($6.1 million) for initiatives including the development of a comprehensive, progressive law aligned with international standards, as well as efforts to address anti-money laundering, counter-terrorism financing, counter-proliferation financing requirements, and best practices.

Introducing the law will involve contributions from approximately 27 institutions, including the Central Bank of Kenya, Capital Markets Authority, Insurance Regulatory Authority, Financial Reporting Centre, Office of the Data Protection Commissioner, State Law Office, and National Intelligence Service.

KES 200 million ($1.5 million) will be allocated to establishing a framework for national and cross-border cooperation and information sharing on virtual asset (VA) activities and virtual asset service providers (VASPs).

Additionally, KES 120 million ($926,000) will be directed toward developing mechanisms to ensure consumer protection, regulate market conduct, and oversee operations.

Approximately KES 300 million ($2.3 million) will be allocated to creating a framework for managing risks associated with virtual assets (VAs) and virtual asset service providers (VASPs).

Another KES 200 million ($1.5 million) will be invested in developing a framework to foster innovation and research within the VA ecosystem, while

An additional KES 200 million ($1.5 million) will support the creation of a framework for awareness and capacity building.

The draft draws inspiration from policies in other African nations and beyond. It aims to facilitate domestic and international cooperation while striking a balance between regulatory compliance and fostering financial innovation.

The East African nation which has lagged behind other African nations in terms of clear regulations, recently invited public comments on the draft rules, with views to be submitted to the email address [email protected] and copied to [email protected] on or before January 24 2025.

🇰🇪REGULATION | Kenya Invites Public Comments on Draft Crypto Regulations, Deadline Set for January 24 2024