IMF Asked Kenya to Establish Clear Crypto Regulations: What’s Next?
The International Monetary Fund (IMF) has recommended that Kenya develop a clear regulatory framework for its cryptocurrency market. The call follows growing concerns over consumer protection, anti-money laundering (AML) and combating the financing of terrorism (CFT). The IMF’s recommendations highlight Kenya’s growing need to update its outdated laws to grow its cryptocurrency industry.
IMF urges Kenya to update cryptocurrency regulations
in a Technical assistance report released On January 8, the International Monetary Fund pointed out that Kenya’s current regulations are based on traditional financial markets and are not suitable for the crypto world. These old rules left loopholes that led to an increase in cryptocurrency-related scams and crime.
At a meeting in Nairobi, International Monetary Fund officials found that Kenyan lawmakers are unsure of how to regulate crypto assets, leading to confusion and delays in decision-making.
To address these challenges, the IMF recommended that Kenya align its regulations with international standards. The new framework should promote growth and innovation in the crypto industry while protecting consumers and maintaining financial stability.
Key recommendations from the IMF
The International Monetary Fund has set out short, medium and long-term steps for Kenya to improve its cryptocurrency regulation. In the short term, the country should analyze the cryptocurrency market and start cooperating with other regulators. It should also clarify which crypto activities will be regulated.
In the medium to long term, Kenya is urged to establish a legal and licensing framework, strengthen regulatory resources and ensure that the country’s regulations are in line with global standards.
Additionally, the IMF recommended that Kenya clearly define crypto-assets in its financial laws to avoid confusion and inconsistency.
Strengthen cross-border cooperation
The IMF also recommended that Kenyan authorities develop clear legal definitions for crypto-assets, ensure consistency in financial laws and avoid confusion between terms such as “digital currencies” and “virtual assets.”
at last, The International Monetary Fund emphasizes the need for Promote international cooperation to manage the risks posed by foreign cryptocurrency exchanges operating in Kenya and ensure a comprehensive regulatory and enforcement approach.
