Kenya To Mandate Crypto Firms to Operate Local Offices

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Kenya is considering a new policy that would require crypto companies to set up local offices. According to a Bloomberg report, this change aims to improve how the government oversees the digital asset sector. The policy is still being reviewed and seeks to create rules for the country’s virtual assets and virtual asset service providers (VASPs). 

Kenya to Protect Its Customers With New Policy

Notably, the policy aims to fill major gaps in the current regulatory system. Meanwhile, the new policy will require crypto businesses, like exchanges and wallet providers, to operate physically in Kenya. This change aims to help the government better monitor and regulate crypto activities, leading to more transparency and accountability in this growing market. 

Furthermore, the policy is part of Kenya’s larger plan to protect consumers and maintain financial stability as cryptocurrencies become more popular. However, the proposed law has an important rule. The law exempts businesses with assets that cannot be traded, transferred, or used for payments outside a closed system. The law also addresses important issues like consumer protection, data privacy, and cybersecurity.

Some critics say the new policy might create extra rules that could slow down innovation in the crypto sector, especially for smaller startups. 

On the other hand, supporters argue that the policy is necessary for the safe and responsible growth of the cryptocurrency industry in Kenya. As the government reviews the proposal, it remains unclear how this policy will affect the future of crypto regulation in Kenya and the wider African region.

Kenya’s Huge Interest in Digital Assets

As reported by TheCoinRise in 2023, Kenya had the highest percentage of cryptocurrency users on the continent (8.5% of the population) due to the growth in cryptocurrency usage in Africa. In 2021, Kenya was ranked fourth globally among nations with an interest in cryptocurrencies.

Recall that the Central Bank of Kenya affirmed that it will monitor developments and adopt a measured approach, considering evaluating the introduction of a digital currency in years to come.

China Imposes New Regulations for a Tighter Grip on Crypto

Meanwhile, China is taking its crackdown on crypto assets to the next level, implementing stringent foreign exchange regulations. These measures, which took effect on December 31, 2024, target cross-border crypto activities. The fresh regulations require banks to scrutinize crypto traders’ identities, track their funds’ sources, and monitor trading patterns.

Additionally, the framework targets crypto traders who try to bypass China’s strict rules. It aims to crack down on illegal cross-border crypto activities. While China has imposed strict measures to restrict crypto trading, it holds over 194,000 Bitcoin. According to the Bitcoin Treasuries tracker from Bitbo, these holdings came from asset seizures linked to illegal activities.

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