Kenya is turning the page on its restrictive cryptocurrency policies with plans to legalize virtual assets. The Treasury Cabinet Secretary, John Mbadi, announced the move today (Friday) in what could mark a shift in the East African country’s financial landscape.

Despite a longstanding ban, cryptocurrency usage has flourished underground. Now, the government aims to harness the benefits of digital assets through a robust regulatory framework, local media publication The Standard reported.

Mbadi emphasized the need for Kenya to balance innovation with regulatory oversight. He mentioned that the emergence and growth of virtual assets (VA) and virtual asset service providers (VASPs) have boosted innovations in the financial system, which have created dynamic opportunities and challenges.

A Policy Rooted in Innovation and Caution

The draft policy intends to establish a fair, competitive market for cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term while addressing risks like money laundering, terrorism financing, and consumer fraud. It draws inspiration from other jurisdictions and aims to make Kenya a significant player in the global digital finance ecosystem.

Kenya’s pioneering role in mobile money services, such as the launch of M-Pesa in 2007, could serve as a foundation for its crypto ambitions. Mbadi highlighted the groundbreaking mobile money revolution to robust financial systems, where the country has strived for financial inclusion.

The Kenyan government now hopes to replicate this success by leveraging blockchain technology and digital currencies to drive economic growth. The decentralized nature of cryptocurrencies presents unique challenges.