Kenya: Blockchain Association of Kenya Hosts Inaugural Digital Assets Policy

4 October 2023
Capital FM (Nairobi)

Nairobi — The Blockchain Association of Kenya (BAK) held the first-ever Digital Assets Policy Safari (DAPS) on September 19 to design a blueprint for Kenya's National Digital Assets Policy.

The meeting sought to find ways to consult the government on regulatory compliance to embrace blockchain adoption.

Participants were engaged in focused groups designed to strengthen the digital asset ecosystem.

One group embarked on drafting a mock crypto bill, meticulously crafting an ideal table of contents for a Kenyan crypto bill.

The second group devised a strategic roadmap for engaging with regulators, contemplating strategies for liaising with the Capital Markets Authority, Central Bank of Kenya, Kenya Revenue Authority, Parliament, and other regulatory entities.

The third group developed a comprehensive framework for consumer protection and education.

Evelyn Wanjiru, a blockchain legal consultant; Fred Ogutu, a tax lawyer and senior associate at Bowmans; Bill Okello, Head of Legal and Regulatory Compliance at Sanduk; and Allan Kakai, Director of Legal and Policy Affairs at BAK, shared insights into the proposed digital asset tax outlined in the Finance Act 2023.

The Finance Bill 2023 introduced the Digital Asset Trade as part of the bill, imposing a three percent tax effective September 1, 2023.

In submission, the advocates led by Allan Kakai, Director, Legal and Policy Affairs, the Blockchain Association of Kenya (BAK), fairly agreed that they want the government to have specific crypto regulations in place within the shortest time possible, a target the government has said it hopes to deliver at the earliest.

Kai, conversely, disagrees with how the digital asset tax is imposed by the government.

As a result, he called on the Kenyan government to operate on fair deals to create a fair ground in the cryptocurrency ecosystem.

The DAPS submissions include strengthening rules on crypto lending or the adoption of regulatory sandboxes, a move that could potentially see stablecoins recognized as a valid form of payment.

"Tax is very harmful and it will end up stifling and killing the industry rather than enabling growth. So, from how the tax is structured, our tax on the growth value of the asset means if I'm disposing of an asset whether or not I'm making a profit, I'm still being taxed as opposed to others"

"The reasons why they specifically never onboarded at digital assets or crypto platform into the sandbox program was that number one, the results and complexity of the technology in the sense that the CMA argues that the technology was complex and novel to the extent that it doesn't have sufficient resources and knowledge around it for them to comfortably on board the digital assets," noted Allan Kakai, Director, Legal and Policy Affairs - the Blockchain Association of Kenya (BAK).

The DAPS event attracted stakeholders, including regulatory authorities, financial institutions, entrepreneurs, startups, legal and compliance experts, academia, investors, blockchain developers, non-governmental organizations, and media representatives.

The team includes Duncan Muchangi, Principal at Unicorn Growth Capital, Robert Muoka, Chairman of the Blockchain Sub-Committee of the Law Society of Kenya, Wahome Wilson, Research and Consulting Lead at Lawyers Hub, and Mukiri Mwirigi, Program Manager at the Africa Blockchain Centre.

The team dove deep into the legal and regulatory challenges faced by digital asset companies in Kenya.

Others include Charles Owiti, an advocate at the High Court of Kenya and a patent agent and ICT data expert.

Alphonce Odhiambo, President of the Internet Society Kenya Chapter; Brian F. Bilahi, Secretary of the Crypto Taskforce at the Kenya Bankers Association; and Philip Kisaka, Assistant Secretary of the Data Privacy and Governance Society of Kenya (DPGSK).

The panel shared their experiences, successes, and failures in navigating policymaking over the past decade.

DAPS garnered support from esteemed partners, including EthSafari, Sheria Online, Binusu, and Chasing Mavericks.

Read the original article on Capital FM.

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