You Won’t Believe Kenya’s Wild Crypto Adventure!

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In the sun-baked heart of Kenya, the wheels of progress are grinding slowly, but surely. Yes, you heard it right: Kenya is finally getting off its high horse and entering the chaotic rodeo of cryptocurrency regulation. The National Treasury, that bastion of fiscal responsibility, has dusted off some old paper and submitted a bill to the National Assembly to wrangle in the wayward Virtual Asset Service Providers (VASPs). Who knew it would come to this?

While other African nations like Mauritius and South Africa are out there throwing crypto parties, Kenya has been playing hard to get. It seems they’ve just been waiting for the right moment, or perhaps for the dust to settle on the Bitcoin craze.

Virtual Asset Service Providers Bill 2025: The Anticipated Arrival

Behold the grand unveiling: the Virtual Asset Service Providers Bill 2025! This is Kenya’s inaugural stab at taming the wild west of digital assets. It’s like the first time a cowboy stepped into town, ready to bring order to the madness. The government is finally strapping on its boots, hoping to corral this wild beast called cryptocurrency and bring some clarity to a financial sector that’s been running amok.

Naturally, the National Treasury is leading this charge, aiming to create a structured approach to crypto regulation. The VASP Bill insists that any self-respecting VASP must get a shiny new license from the Central Bank of Kenya and the Capital Markets Authority. And if that weren’t enough, licensed exchanges must set up physical offices in Kenya—because, you know, getting a real estate license for something that exists only in the digital realm is a quaint notion. Oh, and they’ll also need to play nice with anti-money laundering and counterterrorism measures—because nothing says “trust me” like a bit of government oversight.

Woe to those who dare to issue initial coin offerings (ICOs) without regulatory approval! Only the chosen, the licensed, will be allowed to get in on that action.

A Hilarious History of Kenya’s Crypto Stance

Kenya has had quite the rollercoaster with crypto over the years. Remember 2015? That was when they rolled out a “soft ban” on crypto, warning financial institutions to steer clear of the digital currency circus. It was as if they were saying, “Hey, don’t get too comfy!” The Central Bank of Kenya cited money laundering and general chaos as reasons to shun crypto. They were practically waving a big red flag.

Fast forward to 2022, and the Central Bank governor, Patrick Njoroge, went on record calling calls to convert national reserves into Bitcoin as sheer “craziness.” You’ve got to love a man who stands firm in the face of a psychedelic whirlwind of digital madness. He maintained that not only were digital assets more volatile than a jack-in-the-box, but they also failed to solve any real-world problems. Classic sarcasm!

Despite the government’s heavy skepticism, the irony is that many Kenyans have turned to crypto for relief. In a delightful twist, Njoroge questioned the economic benefit of cryptocurrencies, asking in a tone just dripping with skepticism:

“In our economy, what problem are they resolving? Are they better vehicles for payments or transactions? The answer is no. Are they more secure than a traditional bank account? The answer is no.”

He also added:

“I do know you are under a lot of pressure from these crypto enthusiasts, but I assure you, I’m not the least bit tempted.”

And Now, the Inevitable Tax!

While the world was embracing crypto like long-lost relatives, Njoroge stuck to his guns, having no intention of letting Bitcoin cross the Kenyan border. Yet, in a plot twist worthy of a soap opera, the Kenyan government has had a change of heart. In 2023, the National Assembly Committee waved through the Capital Markets (Amendment) Bill, tasked with regulating and taxing this burgeoning digital gold rush. Yes, they even slapped a delightful 3% digital asset tax (DAT) onto it, like icing on a cake no one asked for. This tax will be levied on income from the transfer or exchange of digital assets—a true Kenyan way of saying, “We’ll take our cut, thank you very much.”

And just when you thought it couldn’t get any more absurd, this pesky tax appeared in the VASP 2025 Bill, causing quite the uproar. Regulators argue it will provide necessary clarity, while stakeholders are concerned that it might stifle innovation. Because nothing screams innovation like a fat tax bill!

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2025-04-12 16:10