The Blockchain Association of Kenya (BAK) is poised to introduce the country’s first community-led Virtual Assets Service Provider (VASP) draft Bill, aimed at regulating the digital asset industry. Published on January 22, 2024, the bill is open for public review and has already received significant contributions and feedback from the digital asset community associated with the lobby group.

The initiative comes in response to a mandate from legislators three months ago, empowering BAK to develop a draft bill regulating crypto assets in Kenya. Michael Kimani, Founder and Chairman of BAK, views this bill as a crucial step towards realizing Kenya’s vision of becoming a digital asset hub, aligning with other developed jurisdictions like Singapore and Dubai.

The VASP Bill addresses industry, consumer, and regulatory concerns, proposing frameworks for licensing, consumer protection, Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF), and a regulatory sandbox. Stakeholders from Kenya, Africa, and beyond are invited to review, comment, and offer feedback until February 7.

Allan Kakai, BAK’s Director of Public Policy and Regulatory Affairs, advocates for collaboration between legal professionals, regulatory authorities, and virtual asset industry players to navigate regulatory challenges effectively and foster innovation in the blockchain ecosystem.

Paul Gachora, CEO and Co-founder of BAK, sees digital assets and blockchain as opportunities for the Kenyan Government to explore new avenues for fundraising investments, targeting $1 billion in foreign direct investments by 2027. The draft VASP Bill, if passed, will position Kenya as a digital asset hub, leading to increased tax revenues for the National Treasury.

The collaborative efforts that began in April 2023 have culminated in the draft VASP Bill, representing a significant milestone. The next steps include developing a report to accompany the bill for parliamentary approval and a pilot program demonstrating the potential of digital assets and blockchain in supporting Kenya’s economic recovery.

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