Blockchain and Encrypted Assets Proposed to be Included within the Kenyan Capital Markets Authority Jurisdiction

04/04/2023 06:47 • Tech Ticker • 146 views

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

The Kenyan parliament is set to discuss a bill that proposes 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. This comes after an increase in interest of digital currencies and blockchain technology in the country.

Background

Blockchain technology has been adopted globally in various industries such as finance, healthcare, and supply chain management. This is due to its ability to provide secure and immutable records that cannot be tampered with. In addition, encrypted assets such as Bitcoin have gained popularity as an alternative form of investment.
However, the emergence of these digital assets has posed a regulatory challenge due to their decentralized nature. This has led to debates on how to regulate them effectively to protect investors without stifling innovation.

Proposed Bill

The proposed bill aims to regulate blockchain and encrypted asset industries by giving the Capital Markets Authority jurisdiction over these digital assets. The bill seeks to expand the definition of securities beyond traditional financial instruments to include digital currencies. This will ensure that digital assets are regulated under the same guidelines as traditional securities.
Furthermore, individuals who obtain licenses from regulatory agencies are required to keep records of all digital currency transactions and pay taxes on any gains. This is similar to the taxation policies currently enforced on traditional securities transactions.

Implications

The inclusion of blockchain and encrypted assets within the jurisdiction of the Capital Markets Authority will provide regulatory clarity for investors and entrepreneurs operating within these industries. It will also protect investors from fraudulent schemes and scams prevalent in the unregulated space.
The expansion of the definition of securities to include digital currencies will provide legal recognition for digital assets, legitimizing them as an investment vehicle. This will in turn attract institutional investors and other traditional financial players, ultimately driving the growth of the Kenyan digital asset industry.

Conclusion

The proposed bill represents a significant milestone in the regulation of blockchain and encrypted assets in Kenya. It seeks to provide regulatory clarity, protect investors, and promote innovation in the digital asset space. With the increased adoption of blockchain technology, it is essential for regulators to keep up with the fast-paced changes in the industry to ensure its growth.

FAQs

Q: What are the benefits of including blockchain and encrypted assets within the jurisdiction of the Capital Markets Authority?
A: This will provide regulatory clarity for investors and entrepreneurs operating within the industry, protect investors from fraudulent schemes, and attract institutional investors and traditional financial players.
Q: Will digital currencies be taxed under the proposed bill?
A: Yes, individuals who obtain licenses from regulatory agencies are required to keep records of all digital currency transactions and pay taxes on any gains.
Q: What is the significance of expanding the definition of securities to include digital currencies?
A: This provides legal recognition for digital assets, legitimizing them as an investment vehicle and attracting more investors to the Kenyan digital asset industry.

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