In a significant policy shift, Kenya is preparing to legalize cryptocurrencies. Treasury Cabinet Secretary John Mbadi announced the government's intention to embrace digital assets, recognizing their potential to foster innovation and financial inclusion.

This move comes after years of strict regulations against virtual currencies. The Kenyan government is drafting legislation aimed at creating a regulatory framework for cryptocurrencies and Virtual Asset Service Providers (VASPs). The proposed policy will address risks associated with money laundering and fraud while establishing a competitive market for digital assets.

Mbadi emphasized that the emergence of virtual assets presents dynamic opportunities and challenges for the financial sector. The government aims to leverage these opportunities to enhance economic growth and empower individuals through technology.

Public consultations on the draft policy will run until January 24, allowing stakeholders to provide input on the proposed regulations. This development follows recommendations from the International Monetary Fund (IMF) for Kenya to improve its crypto policies in line with global standards. As interest in digital assets grows, this legalization marks a pivotal moment for Kenya’s financial landscape.