Kenyan Parliament to Discuss Adoption of Blockchain and Encrypted Assets

According to reports, the Kenyan parliament will discuss a bill proposing to include blockchain and encrypted assets within the jurisdiction of the Capital Markets Authority. The bill also proposes to expand the definition of securities to include digital currencies. In addition, individuals who obtain licenses from regulatory agencies are required to keep records of all digital currency transactions and pay taxes on any gains. (Bitcoin.com)

Kenya bill proposes to expand the definition of securities to include encrypted assets

In recent years, the world has witnessed a significant shift from traditional financial systems to digital assets, with blockchain technology being the key driver of this revolution. The adoption of blockchain technology and encrypted assets has gained significance worldwide, with countries such as Kenya taking bold steps towards the adoption of these technologies to enhance their financial systems. According to reports, the Kenyan parliament will discuss a bill proposing to include blockchain and encrypted assets within the jurisdiction of the Capital Markets Authority. The bill also proposes to expand the definition of securities to include digital currencies.

What is the Capital Markets Authority?

The Capital Markets Authority (CMA) is a regulatory body in Kenya that aims to regulate and develop the capital market in Kenya. The CMA’s primary function is to oversee the issuance and trading of securities within the country. The CMA acts as an independent arm of the government, providing oversight to ensure that all securities issued or traded in Kenya comply with the existing laws and regulations.

The Proposed Bill

The proposed bill seeks to amend various sections of the Capital Markets Act to cater to the new technologies and assets emerging in the world. Currently, the Capital Markets Act does not recognize blockchain or encrypted assets. The proposed changes will expand the CMA’s jurisdiction in two ways. First, the CMA will have control over the issuance and trading of digital assets. Second, the CMA will have control over the licensing of digital asset service providers, including exchanges and wallets.
The bill also proposes to expand the definition of securities to include digital currencies, bringing them under the regulatory purview of the CMA. Currently, securities are defined as “shares, debentures, and bonds.” This expansion will ensure that digital currencies are recognized and regulated as securities, subject to the same oversight and regulation as other securities.

Taxation

Individuals who obtain licenses from regulatory agencies are required to keep records of all digital currency transactions and pay taxes on any gains. The proposed bill aligns with Kenyan tax laws, which require all income gained from any source to be taxed.

Potential Benefits of the Adoption of Blockchain and Encrypted Assets in Kenya

The adoption of blockchain and encrypted assets in Kenya has the potential to transform the country’s economy in several ways. First, it could lead to increased financial inclusion, allowing previously unbanked and underserved populations to access financial services. Second, adopting blockchain technology can lead to increased transparency, making it easier to track and monitor financial transactions. Third, it could promote entrepreneurship by providing a level playing field for businesses regardless of their size.

Potential Challenges

Despite the potential benefits of the adoption of blockchain technology and encrypted assets, there are several challenges in their implementation. First, the lack of understanding of these technologies could lead to the proliferation of scams and fraud. Second, the regulatory framework may not keep up with the pace of innovation in the sector, leading to gaps in oversight. Third, the volatility of these assets could lead to significant losses for investors.

Conclusion

Kenya’s move to adopt blockchain technology and encrypted assets is a step in the right direction in promoting innovation and financial inclusion. The proposed bill, which aims to expand the regulatory framework to include digital assets, will enhance transparency and accountability in the sector. However, the challenges in implementing these technologies should be considered and addressed to ensure that they are not misused.

FAQs

#Q1: What is the Capital Markets Authority?

The Capital Markets Authority (CMA) is a regulatory body in Kenya that aims to regulate and develop the capital market in Kenya. Its primary function is to oversee the issuance and trading of securities within the country.

#Q2: What changes will the proposed bill bring about in Kenya’s financial system?

The proposed bill seeks to expand the CMA’s jurisdiction to include blockchain and encrypted assets. It also proposes to expand the definition of securities to include digital currencies and require licensed service providers to keep records of all digital transactions and pay taxes on any gains.

#Q3: What are the potential benefits of the adoption of blockchain technology and encrypted assets in Kenya?

The adoption of blockchain technology and encrypted assets in Kenya has the potential to promote financial inclusion, transparency, and entrepreneurship. However, the challenges in implementing these technologies should be considered and addressed to ensure their correct usage.