The Kenya Capital Markets (Amendment Bill, 2023), which seeks to legalize crypto trading, needs more public inclusion and participation by the country’s blockchain and Web3 community, the CEO of investment platform Hisa has said.

Eric Jackson told NODO News that the views of the country’s blockchain community need to be incorporated into the proposed bill, to make it wholesome and comprehensive, if Kenya wants to succeed in making regulation an enabler of crypto and Web3 adoption.

“It’s a first step. Overall it is not fully well thought out. It leaves a lot of players uncovered,” Jackson says. “But it is a step in the right direction in that we have some form of legislative conversation around cryptocurrencies.”

However, there is a caveat. If parliament approves the bill, the country’s crypto community will be required by the law to remit capital gains tax or income tax to the Kenya Revenue Authority for the sale or use of crypto. It reads: “Where the digital currency is held for a period not exceeding 12 months, the laws relating to income tax shall apply or for a period exceeding 12 months, the laws relating to capital gains tax shall apply.”

The bill was introduced by Mosop Member of Parliament Abraham Kipsang Kirwa last November. It aims to recognize cryptocurrency as digital money in Kenya’s financial system, and in essence, legalize its use in the country.

“The amendment will provide for specific provision to govern digital currency transaction in Kenya including the definition of digital currencies, its creation through crypto mining,” the bill reads.

Jackson notes that the bill might be only looking at the revenue side of cryptocurrencies than looking at the entire industry. He adds that the bill needs to be well thought-out before even being discussed in parliament.

“The players in the industry were not fully consulted nor their views taken,” he comments. Singapore-based crypto research company Tripple-A estimates the number of crypto traders in Kenya at 6.1 million, out of a population of close to 55 million people.

However, the creation of a technical committee last December to look at cryptocurrency regulation in Kenya holds promise to more public participation in the creation of a crypto law, according to Jackson. The committee includes the Central Bank of Kenya (CBK), the Capital Markets Authority (CMA), the Insurance Regulatory Authority (IRA), the Retirement Benefits Authority (RBA) and the Sacco Societies Regulatory Authority (Sassra).

-Edited by Shigeru Sato
-Photo: Nairobi, Kenya / Unsplash