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Kenya’s parliament just made a bold bet on the future of finance, passing sweeping legislation to regulate cryptocurrencies and digital assets — a move that could position the East African nation as the continent’s crypto hub while most countries are still debating whether to adopt or completely ban the technology.
The Virtual Asset Service Providers Bill was approved last week, putting Kenya on the verge of joining South Africa as the only African country with comprehensive laws governing the digital assets sector, according to Kuria Kimani, chair of the National Assembly’s finance committee, as cited by Reuters. The legislation awaits President William Ruto’s signature to become law.
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The timing couldn’t be more strategic. As countries prepare for a boom in U.S. dollar-backed stablecoins that global policymakers warn could harm the currencies of less developed economies, Kenya is taking a proactive approach by establishing clear rules before the market dictates terms.
The law designates the central bank as the licensing authority for the issuance of stablecoins and other virtual assets, while the capital markets regulator will license crypto exchanges and trading platforms, according to Reuters.
This regulatory clarity is already seriously attracting the attention of key players. Kimani cited past conversations between platforms like Binance and Coinbase (NASDAQ: COIN) and the government, suggesting increased investment in the fintech sector is likely.
“We hope that Kenya can now become the gateway to Africa,” Kimani told Reuters. “Most young people aged 18 to 35 now use virtual assets to transact, settle payments and as a way to invest or do business.”
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Kenya is not starting from scratch when it comes to financial innovation. The country pioneered mobile financial services with M-Pesa technology, operated by telecommunications company Safaricom in Kenya, which provides money transfer, savings and investment services to tens of millions of people.
