Kenya is drafting legislation to legalize cryptocurrencies, marking a departure from its previous warnings about the crypto industry. Treasury Cabinet Secretary John Mbadi highlighted the rise of Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs), emphasizing the need for a regulatory framework to harness the benefits while controlling risks related to fraud and money laundering. The proposed policy aims to create a fair and innovative environment for the cryptocurrency sector, promoting financial literacy. Previously, in December 2015, the central bank had prohibited the use of cryptocurrencies, stating they were not legal tender. However, by 2022, interest in the industry surged, with reports indicating that approximately 8.5% of Kenyans owned cryptocurrencies. This legislative shift aims to capitalize on the evolving financial landscape in Kenya.

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