Citizens of various African nations have embraced bitcoin and other cryptocurrencies, despite constant warnings from the government. Now, Kenya’s House of Parliament has mandated the nation’s treasury secretary, Henry Rotich, to draft regulations that would either legalize digital assets or ban them entirely in Kenya.
The Bitcoin Hotseat
According to a Business Daily report, the Kenyan Finance and National Planning Committee has summoned the country’s treasury secretary, Henry Rotich, demanding immediate answers as to why the Treasury, as well as the Central Bank of Kenya (CBK), have failed to establish regulations for the cryptospace and for taxing crypto traders. The committee expressed its disappointment over the proliferation of unlicensed crypto-linked businesses into the country, saying,
“We are surprised to hear that even the CBK is not aware that there is a lounge at Kenyatta University, an ATM in town, and a hotel in Nyeri which trade in bitcoins,” said the chairperson of the committee, Joseph Limo. He added, “there is a bigger problem in Kenya since people are trading billions in virtual space yet the Treasury has not licensed and taxed it like trade in M-Pesa and bank transactions.”
Finding a “delicate balance”
In response to the committee, Rotich explained that due to the volatile nature of the flagship cryptocurrency, demonstrated by its surge to nearly $20K in December and sharp fall to around $8,500 in February, it was not yet clear to the government whether to take it seriously or not. Rotich also noted that the global cryptosphere is still in its very nascent stage and that world authorities are taking considerable steps to formulate laws that would create a balanced digital currency space while curbing crypto-related crimes at the same time. Rotich stated:
“I am not aware of people operating locally. But I will endeavor to find out whether we have local exchanges. The issue of cryptocurrencies is evolving, and we can take a position as a country. This is a delicate balance between supporting innovation and killing it.”
A Glimmer of Hope for Cryptos?
Though the CBK has since made it clear to citizens that bitcoin is not a legal tender in the country, a handful of bitcoin-related businesses in the region, such as BitPesa, a bitcoin exchange and payments firm, has been doing brisk business despite all odds. Also, many Kenyan youth engage in bitcoin trading and mining.
It is noteworthy that while Kenyan authorities are still pondering on the path to follow regarding virtual currency regulation, their Ugandan neighbors have taken several steps up the crypto ladder, making the region a hotbed for bitcoin-based businesses. On July 1, 2018, BTCManager reported that the world’s largest cryptocurrency exchange by 24-hour trading volume, Binance, had announced the impending launch of a crypto-fiat exchange in the east African nation.