Kenya has been advised to establish a comprehensive regulatory framework for its cryptocurrency market to safeguard consumers and address financial risks. The recommendation comes amid concerns over outdated regulations and increasing crypto-related fraud.
A recent technical report highlighted the need for Kenya to align its crypto policies with international standards to tackle issues like anti-money laundering and combating terrorism financing. Current rules for traditional markets lack the necessary legal authority to oversee the crypto sector effectively, leading to a rise in scams and other illegal activities.
Short-term measures include conducting detailed market analysis and fostering collaboration among regulatory bodies, while long-term strategies involve creating legal frameworks and strengthening supervisory capacity. Kenya is also encouraged to engage with global regulators to manage risks associated with international exchanges and ensure cross-border enforcement.
By defining crypto assets clearly and addressing regulatory inconsistencies, Kenya can foster innovation, protect consumers, and maintain financial stability within its growing crypto market.