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Kenya, often cited as an example for the adoption of cryptocurrencies in Africa, finds itself in the crosshairs of the IMF. But instead of a sledgehammer, the institution opted for soft recommendations, advocating an update of outdated regulations and alignment with international standards. The burning question: what impact will this modernized framework have on an emerging crypto market, rich in promise but still in its infancy?
IMF urges Kenya to modernize its crypto laws
In a newly published technical report, the IMF, author of a new offensive in El Salvador, reminded Kenya that its regulations in force seems more like a telegram manual than an appropriate response to modern challenges. “Current laws provide little or no binding legal basis“, declares the organization, emphasizing glaring loopholes that facilitate scams and other illicit activities.
On the menu: recommendations?
- An in-depth analysis of the local crypto market;
- A clear and consistent definition of terms such as “crypto-asset” or “virtual asset”;
- Cross-border cooperation to monitor foreign platforms.
Furthermore, alignment with frameworks such as the Bali Fintech Agenda or the FATF recommendations is considered crucial. Consistent regulation would help protect consumers while encouraging innovation.
However, between hesitant politicians and a still-burgeoning crypto sector, Kenya seems caught between the rock of compliance and the hard place of innovation.
A booming crypto market, but poorly structured
The Kenyan crypto market, although growing rapidly, remains a land of contrasts. Apps like M-Pesa make it easy to make bitcoin payments, even going so far as to buy fries with ₿.
However, this rapid adoption has not been accompanied by a strong legal framework, creating a vacuum for scams.
To resolve this problem, the IMF recommends pragmatic solutions:
- Implement a legal framework and licenses within 12 to 24 months;
- Educate regulators and consumers;
- Strengthen control resources to combat abuse.
“Kenya has unique potential, but it is essential to lay a solid foundation to ensure a transparent and sustainable market.», underlines the report.
However, some voices are being raised to criticize the interference perceived as a hindrance in a sector which relies on its flexibility to innovate.
As world decision-makers look to the paths blazed by figures like Trump, the question remains: is converting reserves into bitcoins still madness or a forward-thinking vision, as the central bank governor claimed of Kenya in 2022?
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The blockchain and crypto revolution is underway! And the day when the impacts are felt on the most vulnerable economy in this world, against all hope, I will say that I had something to do with it
DISCLAIMER
The views, thoughts and opinions expressed in this article belong solely to the author and should not be considered investment advice. Do your own research before making any investment decisions.
