The Government of Kenya is committed to creating the necessary legal and regulatory framework in order to leverage opportunities presented by VAs and VASPs while managing the resultant risks. This policy guides the establishment of a sound legal and regulatory framework providing the fundamental foundation of a fair, competitive, and stable market for VAs and VASPs with the aim of fostering innovation, enhancing financial literacy, and ensuring sound risk management. The principal goal of the policy is to cement Kenya as a major player in the global digital finance ecosystem.
- The main objective of this policy is to guide the development of a fair, competitive, and stable market for VAs and VASPs in Kenya. Specifically, the policy seeks to:
i. Guide the development of a legal framework governing VAs and VASPs.
ii. Promote a fair and efficient market for VAs and VASPs.
iii. Ensure sound risk management for VAs and VASPs; and
iv. Promote financial literacy and innovation on VAs and VASPs. - Kenya has witnessed increased adoption of VAs for use in payments, remittances, and investments over the years. VAs present opportunities to promote digital finance, boost ecommerce, facilitate international trade, and even create a new class of digital jobs. However, the benefits of VAs have been stemmed by cybersecurity risks, data privacy risks, and frauds and scams in the country. Further, the activities of the VASPs are not limited to Kenya and therefore some of the VASPs operating locally are not registered and/or licensed in Kenya, hence posing potential risks related to but not limited to ML/TF/PF. Despite Kenya having put in place an overarching Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) legislative framework that addresses broad ML/TF risks, there is no policy and legal framework that governs VAs activities and VASPs.
- The National Policy covers all aspects of regulation and development of the virtual asset’s ecosystem in Kenya.