The Blockchain Association of Kenya (BAK), a proponent of digital asset regulations, has taken a similar step and presented Kenya's parliamentary chambers with the first bill governing Virtual Assets Service Providers (VASP).

On January 22, 2024, the plan—which aims to regulate the country's rapidly expanding digital asset market—was first made available for public review.

Since then, the local cryptocurrency community has responded to the idea in a variety of ways.

This legislative attempt is in response to a three-month-old request from the Kenyan parliament. The parliament asked a civil society organisation to develop the groundbreaking cryptocurrency legislation by February 14th, 2023, following their first meeting on October 31, 2023.

In August 2023, the advocacy organisation had previously addressed the Committee on Finance and National Planning of the National Assembly, expressing concerns about The 2023 Finance Act includes the Digital Asset Tax (DAT).

Based on transactions from July 2022 to June 2023, Kenya has the third-largest crypto economy in Africa, behind only South Africa and Nigeria, according to a Chainalysis research. Kenya is the 21st country in the world for bitcoin adoption.

However, there are a number of difficulties facing Kenya's digital asset market, including fraud, strict tax laws that jeopardise customer safety, and prohibitive operating limits for new cryptocurrency businesses.

The purpose of the proposed legislation is to strengthen consumer protection by creating a strong regulatory framework.

In order to allay business and regulatory concerns, it also recommends licencing requirements for operators inside an experimental regulatory framework, together with anti-money laundering and counter-terrorism financing measures.

BAK has invited interested parties from Kenya and abroad to examine and critique the cryptocurrency bill. Today, February 7, 2024, marks the deadline for feedback.

The advocacy group will utilize this input to refine their initial draft and plan to present an updated version to the National Assembly’s Departmental Committee on Finance and National Planning on February 14.

Michael Kimani, the Founder and Chairman of BAK, highlighted the bill’s potential to elevate Kenya to a global digital asset nexus, comparable to established hubs like Singapore and Dubai.