Kenyan law taxes crypto protects consumers

The Capital Markets Law of Kenya was subject to a potential modification that was suggested on November 21. If this amendment were to become law, private individuals who own cryptocurrencies or participate in the trading of cryptocurrencies would be required to provide the Capital Markets Authority of Kenya with information regarding their activities for the purpose of determining how much tax should be collected from those activities.

To our knowledge, this is the first time that cryptocurrencies have been incorporated in any of Kenya’s financial regulatory system.

According to the Capital Markets (Amendment) Bill, Kenyans would be obligated to declare and pay capital gains taxes to the Kenyan Revenue Authority if they sell or purchase digital currencies. This obligation is detailed in the legislation.

Any cryptocurrency that is held for more than a year will be subject to capital gains tax, while any cryptocurrency that is held for less than a year would be subject to income tax on its value.

In Kenya, there is a graduated tax on income that ranges from 10 percent all the way up to 30 percent.

A centralized electronic record of all transactions involving digital currencies throughout the country would be created as a result of the bill, which would also make it possible for individual crypto dealers to register with the government. Additionally, it would recognize digital currencies as being securities.

Kenya is rated number 19 in the world for the amount of persons that use cryptocurrencies, and it is ranked number 5 for trading amongst peers, according to a survey that was done by Chainalysis and released in September.

At the same time as Kenyan President William Ruto is making a request to broaden the country’s income base, the possibility of making the move that is now being discussed is being studied.

It is estimated that around 4 million individuals in this country make use of various cryptocurrencies.

Due to the fact that approximately 8.5% of the population lives in privately owned homes, Kenya now has the fifth highest rate of property ownership in the world.


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NEAR Foundation Sets Up a Regional Hub in Kenya, Boosting Blockchain Innovation in Africa

To trigger talent development, education, and blockchain innovation on African soil, NEAR Foundation, has launched a regional hub in Kenya in collaboration with Sankore, an African-focused blockchain community.

As a Swiss non-profit in charge of the NEAR protocol, the NEAR Foundation sees the hub as a stepping stone towards more blockchain growth in Africa.

Marieke Flament, the CEO of NEAR Foundation, noted:

“We are excited by the potential avenues throughout Africa for blockchain solutions, which come from innovation in development, education and talent. This hub represents a unique opportunity to partner with local talent not only for the opportunities that we know exist today but also for the opportunities yet to be created in the future.”

The hub will consist of an incubation program, events, a Sankore Bounty ecosystem, and an academy. It seeks to bring together Africa’s most talented blockchain developers and support from international investors. 

Kevin Imani, Sankore’s founder, pointed out:

“We are thrilled to be working with NEAR to educate and nurture talented individuals to become world-class blockchain developers.”

With Kenya being ranked fifth in 2021’s Global Crypto Adoption Index, NEAR saw the nation as ideal for setting up the hub.

Imani added:

“Our dream is to lead the way in blockchain innovations in providing solutions to Africa’s biggest problems. The NEAR Protocol allows tomorrow’s brightest developers to build custom solutions with scalability, security, and transparency and this hub is the next step in turning our shared vision into reality.”

The African continent continues to gain more limelight in the crypto/blockchain space. 

For instance, leading crypto exchange Binance is bridging the financial Gap in Francophone Africa by offering blockchain education, Blockchain.News reported. 

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Crypto Exchange FTX Expands Business to Africa, Partnering Kenyan Fintech Firm AZA Finance

To expand its global footprint and presence on African soil, top-notch cryptocurrency exchange FTX has partnered with AZA Finance, a Kenyan-based fintech company. 

Through the strategic partnership, FTX seeks to enhance the use of Web3 and cryptocurrencies in Africa by offering ideal networking and learning resources.

Moreover, plans are underway to offer African and digital currency trading pairs, which will make it easier to deposit and withdraw cryptocurrencies using African currencies. The non-fungible tokens (NFTs) market is also expected to be boosted by onboarding artists on the continent.

Elizabeth Rossiello, AZA Finance CEO, welcomed the partnership and stated:

“After serving these booming enterprises for years, we know that the next generation of users, creators, and builders for the Web3 economy is undoubtedly African.”

The swift adoption of cutting-edge technologies by Africans coupled with the continent’s rapid-growing population, which is anticipated to double by 2050, also triggered this partnership. 

Founded in 2013, AZA Finance, formerly called BitPesa, is a provider of cross-border payment solutions for businesses with a presence in ten African countries. 

Based on a valuation of $32 billion, FTX has emerged as one of the leading crypto exchanges globally, and its expansion drive continues to gain steam.

For instance, FTX recently announced plans to open a regional headquarters in Dubai following the approval of its virtual-asset license.

The exchange’s CEO Sam Bankman-Fried acknowledged that FTX Europe, a branch operating in Europe and the Middle East, would offer “complex crypto-derivatives products with centralized counterparty clearing to the institutional market. 

FTX Europe was established earlier this month, becoming the second affiliate of the crypto exchange after FTX US, which was launched in May 2019. 

The company continues to expand its business worldwide. In February, FTX acquired Japanese digital assets brokerage firm, Liquid Group, to bolster its global presence, Blockchain.News reported. 

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Kenyan Central Bank Seeks Public Opinion concerning CBDC

As a change of tune about crypto assets, the Central Bank of Kenya (CBK), Kenya’s apex bank, seeks to ask for public opinion about the potential introduction of a central bank digital currency (CBDC).

As one of the pioneers of mobile money payment through Safaricom’s M-Pesa in 2007, Kenya is weighing its options concerning setting foot in the CBDC space.

In a statement, the CBK noted:

“The balance of risks and benefits of central bank digital currency will vary from one economy to another.”

The bank acknowledged some of the benefits rendered by a CBDC, including minimizing cross-border payment costs and offering financial inclusion to those limited by technological knowledge or infrastructure. 

Once to roll out the plan, CBDC is expected to drive the financial inclusion of at least 1.7 billion people left out of the banking system. 

On the other hand, the CBK cautioned about potential risks triggered by CBDCs. That could be included hindering the effectiveness of the monetary policy by opening doors to money laundering and constraining commercial banks.

For a CBDC to work, the bank noted that regional cooperation could shorten the payment cycle by eliminating the multi-layered banking structure. 

Similarly, sentiments were recently echoed by the Bank of Japan (BOJ) governor that joining hands with Europe and the United States was crucial in the issuance of a central bank digital currency. Meanwhile, Tanzania is already setting the ball rolling in the East African region because its CBDC rollout is in high gear. 

CBDCs are digital assets backed by central banks and pegged to a real-world asset meaning that they represent a claim against the bank just the way banknotes work. Moreover, central banks will have full control of CBDC supply.

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Central Bank of Kenya seeks public input on potential CBDC

The Central Bank of Kenya (CBK) has published a discussion paper on its central bank digital currency (CBDC), seeking public input on the potential benefits and risks and regulatory issues of introducing a CBDC in Kenya.

In a statement, the CBK has highlighted that using a CBDC might improve cross-border payments by making them more efficient and less expensive. The regulator says that CDBC solutions can flatten the multi-layered correspondent banking structure and shorten payment chains in a discussion paper exploring the future use of a digital currency:

“A key opportunity where CBK sees potential value is the use of CBDC in facilitating cross-border transactions, while it is difficult to quantify the benefits, CBDCs may have the potential to lead to efficiency gains by flattening the multi-layered correspondent banking structure and shortening the payment chains.”

The watchdog has given Kenyans until May 20 to submit their comments on the paper that examines the dangers and possibilities of CBDC, which has already been implemented in several nations worldwide, including Nigeria. The CBK will gather comments on the issue for 100 days through an online form.

CBDCs, according to CBK, may protect the public from the danger of new types of private money by providing safer and more trustworthy payment services than newly created forms of privately issued money, such as stablecoins. Nonetheless, it stated that CBDCs represent a risk for cyberattacks and various security issues, including data privacy concerns.

The Kenyan government has yet to decide whether to implement CBDC. The latest discussion paper is meant to jumpstart a debate and provide a foundation for further study.

Kenya has joined an exclusive cadre of nations that are either studying or have already started CBDC development. According to the Atlantic Council, as of June 2019, 91 countries are currently involved in sovereign digital currency research, with just 14 having advanced to the pilot stage. According to the information, nine nations have implemented a CBDC.

Related: Nigerian president to unveil eNaira central bank digital currency

China is currently the most advanced country operating a CBDC trial, dubbed the digital yuan, and the mobile application has already been downloaded over 20 million times since Jan. 4. As reported by Cointelegraph, Indian finance minister Nirmala Sitharaman revealed the launch of a digital rupee by 2022–23 to boost economic development.