In an effort to create a draft for Kenya’s National Digital Assets Policy, the Blockchain Association of Kenya (BAK) recently organized the first-ever Digital Assets Policy Safari (DAPS).
Regulatory Authorities, Financial Institutions, Entrepreneurs, Startups, Legal and Compliance Experts, Academics, Investors, Blockchain Developers, Non-Governmental Organizations, and Media representatives were among the stakeholders who attended the DAP session.
“We need to create education, awareness, and trust within the ecosystem, and the key adoption is to create an enabling environment,” says Nadeem Anjarwalla, Binance Director for East and West Africa. We think that the proper regulation promotes innovation, space development, and business.
This forum comes at a time when Kenya’s Finance Bill 2023 introduced the Digital Asset Tax as part of the bill, imposing a three percent tax effect from September 1, 2023.
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.
Allan Kakai would like 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. “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 digital assets or crypto platforms into the sandbox program were, 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 onboard the digital assets,” noted Kakai.
The DAPS submissions include strengthening rules on crypto lending or the adoption of regulatory sandboxes, a move that could potentially see stable coins recognized as a valid form of payment.
Data from the World Bank indicates that world crypto trading has grown swiftly, especially in countries with more favorable tax frameworks for digital assets.
By fully embracing innovations around crypto and creating friendly tax compliance for digital investors, Kenya will have the opportunity to tap into more potential clients and, as a result, more job opportunities, ultimately generating the country’s income.
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.
Ali Hussein Kassim, CEO, AHK Corp.; Charles Owiti, Advocate, High Court of Kenya; Patent Agent & 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), led the discussion on lobby group ecosystems.
The panel shared their experiences, successes, and failures in navigating policymaking over the past decade.
The participants were engaged in focused group discussions 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. DAPS garnered support from esteemed partners, including EthSafari, Sheria Online, Binusu, and Chasing Mavericks.