Crypto industry pushes for regulatory clarity as Kenya weighs oversight framework

Fintech and cryptocurrency stakeholders have called for clearer and more coordinated regulation to support growth in Kenya’s digital asset sector, even as policymakers weigh concerns around financial stability, taxation and consumer protection.

The calls were made during a two-day stablecoin conference in Nairobi that brought together private sector players and policy advocates.

Wale Osideinde, Chief Operating Officer at Bitnob, said Kenya had made progress in developing a legal framework for digital assets compared to many African peers.

“We have learned a lot from Kenya for taking the lead in Africa with standalone crypto legislation. This creates a learning platform for countries like Nigeria and others across the continent. Cryptocurrency is the future, and it is time we harmonise regulations to support the sector’s growth,” he said.

He argued that digital currencies could help facilitate cross-border payments under the African Continental Free Trade Area (AfCFTA), a market estimated at $3.5 trillion.

“Imagine if African countries embraced cryptocurrency as a new form of payment. It would make cross-border settlements easier. The main barrier remains regulatory frameworks, but we are on the right path toward acceptance.”

Industry players say stablecoins — digital tokens typically pegged to fiat currencies — are increasingly being used globally for remittances, supplier payments and cross-border trade.

However, regulators have previously expressed caution over digital assets, citing risks including volatility, fraud, money laundering and consumer losses.

The Central Bank of Kenya has in past advisories warned that cryptocurrencies are not legal tender in Kenya and that users operate at their own risk.

Policymakers have maintained that any regulatory framework must safeguard financial stability and consumer protection.

Tony Olendo, Chairman of the Virtual Assets Chamber of Commerce, said the introduction of the digital asset tax had raised concerns within the sector.

“The digital asset tax was a wrong move because it hinders sector growth. It risks driving innovation to other countries and could choke startups that have chosen to invest here,” he said.

Kenya introduced a digital asset tax in 2023, targeting income derived from the transfer or exchange of digital assets, as part of broader revenue mobilisation efforts by the National Treasury.

Olendo called for closer coordination between the Capital Markets Authority and the Central Bank to ensure regulatory clarity. Despite policy uncertainty, industry executives say adoption continues to grow.

Edward Ndichu, CEO and Co-Founder of WapiPay, said Kenyans transact approximately $500 million monthly in stablecoins.

“These transactions have been made possible by regulators, including the National Treasury, the Central Bank and the Capital Markets Authority, who have supported the cryptocurrency space,” Ndichu said.

Independent market reports indicate sustained investor interest in Africa’s fintech space.

PwC’s Global M&A Trends 2023 report shows that Africa’s tech and fintech sectors recorded a 22 per cent year-on-year increase in deal volume in 2023, driven partly by cross-border payment inefficiencies and demand for scalable digital solutions.

A McKinsey survey projects that Africa’s fintech revenues could reach $47 billion by 2028, up from approximately $10 billion in 2023.

Analysts note that while digital assets may offer efficiency gains in cross-border transactions and remittances — which reached an estimated $100 billion into Africa in 2024 — regulatory clarity will remain central to balancing innovation with financial oversight.