Crypto: IMF Urges Kenya to Align with Global Regulations

Kenya, often cited as an example for cryptocurrency adoption in Africa, finds itself in the crosshairs of the IMF. But instead of a hammer blow, the institution has opted for gentle recommendations, advocating for an update of outdated regulations and alignment with international standards. The burning question: how will this modernized framework impact an emerging crypto market, rich in promises but still in its infancy?

The IMF urges Kenya to modernize its crypto laws

In a freshly published technical report, the IMF, author of a new offensive in El Salvador, reminded Kenya that its current regulations resemble more of a telegram manual than an appropriate response to modern challenges. “The current laws offer little to no binding legal basis”, states the organization, pointing out the glaring gaps that facilitate scams and other illicit activities.

https://twitter.com/cryptonews/status/1877309659880489187

On the menu: recommendations?

• A thorough analysis of the local crypto market;
• A clear and coherent definition of terms such as “crypto-asset” or “virtual asset”;
• Cross-border cooperation to monitor foreign platforms.

Furthermore, alignment with frameworks such as the Bali Fintech Agenda or FATF recommendations is deemed crucial. A consistent regulation would help protect consumers while encouraging innovation.

However, between hesitant politicians and a still-booming crypto sector, Kenya seems caught between the hammer of compliance and the anvil of innovation.

A booming crypto market, but poorly framed

The Kenyan crypto market, although growing rapidly, remains a land of contrasts. Applications like M-Pesa facilitate payments in bitcoin, even going as far as buying fries with ₿.

However, this rapid adoption has not been accompanied by a solid legal framework, creating a gap where scams thrive.

To address this, the IMF advocates for pragmatic solutions:

• Implement a legal framework and licenses within 12 to 24 months;
• Educate regulators and consumers;
• Strengthen supervisory resources to curb abuses.

“Kenya has a unique potential, but it is essential to lay solid foundations to ensure a transparent and sustainable market”, emphasizes the report.

https://twitter.com/MMCrypto/status/1869528869088448588

However, some voices are rising to criticize perceived interference as a hindrance in a sector that relies on its flexibility to innovate.

As the decision-makers of this world look towards the paths paved by figures like Trump, the question remains: is converting reserves into bitcoins still madness or a cutting-edge vision, as the governor of the Central Bank of Kenya claimed in 2022?