Kenya's move to legalise various virtual monies, such as cryptocurrencies, received a major boost after the Senate resolved to develop frameworks for their operation in the country.
The Senate Standing Committee on Information, Communication and Technology on Thursday, February 16, resolved to engage the Central Bank of Kenya (CBK) to recognise digital currencies as legal tenders.
Led by Trans Nzoia Senator Allan Chesang, the standing committee also publicised plans to engage other stakeholders to develop policies regarding virtual assets, services providers and the use of crypto in Kenya.
While defending the move, the senate committee argued that the policy frameworks would enable Kenyans to transact using digital currencies with fewer risks.
Besides, pushing for the introduction of crypto regulations in the country, the Chesang-led committee also announced plans to fast-track the adoption of the Central Bank Digital Currency (CBDC)
"While considering the response received from the CBK regarding the Committee’s inquiry on digital assets infrastructure in Kenya at Parliament Buildings, the Members of the Committee emphasised the need to have a laid down policy that governs the Central Bank Digital Currency and crypto assets in the country to ensure Kenya harnesses the benefits of financial innovation while minimising the risks," the statement from the committee read in part.
In December 2015, CBK, led by Governor Patrick Njoroge, insisted that the country's virtual currencies, such as Bitcoin, were not legal tender.
CBK further warned Kenyans, explaining that virtual currencies lacked protection to help Kenyans recover their money if the providers go out of business.
"No entity is currently licensed to offer money remittance services and products in Kenya using virtual currency such as Bitcoin," CBK's statement read in part.
"CBK reiterates that Bitcoin and similar products are not legal tender nor are they regulated in Kenya. The public should therefore desist from transacting in Bitcoin and similar products," the notice further read.
However, in February 2022, CBK released a discussion paper examining the applicability of a potential Central Bank Digital Currency (CBDC) in Kenya.
The paper informed Kenyans to share their views to guide the process of introducing a digital currency in the country.
