How a Community in Kenya Developed its First Cryptocurrency Policy

"I extend my deepest gratitude to everyone who contributed to this remarkable achievement. It is a testament to the power of community-driven initiatives and the transformative potential of technology when wielded for the greater good." - Founder and Chairman of the Blockchain Association of Kenya (BAK Michael Kimani

In 2017, a group of young Kenyans who believed in the potential of cryptocurrencies and blockchain for socioeconomic transformation for Kenya’s economy and its people founded the Blockchain Association of Kenya (BAK).

Between then and today, the BAK blossomed into one of the most prominent community groups in East Africa. Through seven years of dedicated effort, the BAK cultivated 100+ micro-influencers, each individual contributing to educating and engaging a network in the thousands.

In 2023, our analysis of the Kenyan industry identified the lack of policy as a barrier to blockchain commercial enterprises setting up in Kenya, consumer protection of the public from numerous cryptocurrency scams and promoting blockchain innovation.?

Therefore, in January 2023 and subsequent months, we validated our thesis through a series of community forums hosting stakeholders, such as traders, exchanges, community managers and creators to gather feedback regarding the issues facing the ecosystem.?

From the feedback, we understood there was a gap, and that we had to make a case for favorable policy and frameworks. A onerous 3% gross tax on digital assets had come up in May for consideration as part of the Finance Bill 2023.?

In March last year, we presented our feedback in a formal submission to the National Planning and Finance Committee in person and published our opinion on the matter. Unfortunately, the digital asset tax was passed as part of the Finance Bill 2023. However, we did not waver.

Later in the year in August, we filed a petition in the high court questioning the constitutionality of the 3% digital asset tax.?

While the case was ongoing, Africa’s biggest blockchain conference, ETHSafari , was underway in Nairobi & Kilifi on the week of 18th - 24th September. That week we hosted a diverse set of stakeholders from the ecosystem for our?inaugural Digital Assets Policy Safari (DAPS) workshop at the Chez Mahmadi Wellness Centre in Nairobi.?

The following month in October, thanks to our stakeholders, we convened a meeting with the members of the National Planning and Finance committee where we got a mandate to deliver a draft bill to govern the use and trading of cryptocurrencies.

Following the mandate, we got together with stakeholders from our network to form a sub-committee that met periodically to map the bill drafting process, including crowdfunding resources. Our joint efforts crystallized into actionable steps at a workshop in Naivasha on the 8th of December 2023.

10 weeks later, we had a draft ready to be shared with our community. We held community forums to gather feedback from them to refine the draft. The process of coming together to crowdsource knowledge, and experience was a pleasure to witness as the draft bill took shape.?

After our community forums, we held a final stakeholder breakfast on February 17th 2024 with representatives of government, international development agencies and the commercial sector to map the gaps in the state of cryptocurrencies and blockchain in Kenya.?

Finally, on March 4th 2024, the Blockchain Association of Kenya submitted the final draft of the Virtual Assets Service Provider (VASP) Bill 2024 to the clerk of the National Assembly marking a milestone in our journey.

"I extend my deepest gratitude to everyone who contributed to this remarkable achievement. It is a testament to the power of community-driven initiatives and the transformative potential of technology when wielded for the greater good." - Founder and Chairman of the Blockchain Association of Kenya (BAK) Michael Kimani

With the submission of the VASP Bill 2024, we have set the stage for a new era of innovation and prosperity in Kenya's blockchain ecosystem. As we continue to navigate the ever-evolving landscape of technology and regulation, let us remain steadfast in our commitment to driving positive change for our nation and its people.

The Blockchain Association of Kenya (BAK) is a non-profit society registered in Kenya on a mission to catalyze the potential of digital assets and blockchain technology for the people and institutions of Kenya.

First published on Citizen Digital