Kenyan Parliamentary Committee Approves Bill to Include Cryptocurrencies in Definition of Securities
A parliamentary committee in Kenya has given its approval to a bill that seeks to expand the definition of securities to include cryptocurrencies. The bill, known as the Capital Markets (Amendment) Bill, 2023, proposes the taxation of crypto exchanges and digital wallets, as well as the implementation of a capital gains tax for users who profit from the sale of their crypto assets.
Bill Moves Closer to Presidential Assent
Following the committee’s approval, the bill will now move to the Kenyan National Assembly for a second reading. Further amendments can be debated and made during the third reading stage. Once approved by the National Assembly, the bill will be sent to the Kenyan president for his assent. It is considered a crucial piece of legislation for a country with a large number of crypto users.
Taxation and Regulation in Focus
Under the proposed bill, crypto exchanges and digital wallets will be subject to taxes, while users who make capital gains from the sale of crypto assets will also be liable for capital gains tax. The bill aims to protect Kenyan citizens from the risks associated with cryptocurrencies and ensure they are regulated appropriately.
Ongoing Debate and Regulatory Climate
The Central Bank of Kenya has previously expressed reservations about cryptocurrencies, but their popularity continues to grow in the country. Despite concerns from regulators, Kenya is now regarded as one of Africa’s major crypto markets. The bill includes provisions that require individuals to provide details of their cryptocurrency transactions to the Capital Markets Authority, including proceeds, costs, gains, and losses.
Hot Take: Kenya Takes a Step towards Crypto Regulation
The approval of the bill by the parliamentary committee signifies Kenya’s move towards regulating cryptocurrencies and protecting its citizens from associated risks. By widening the definition of securities to include cryptocurrencies, the bill aims to provide a legal framework for crypto exchanges and digital wallets, while also ensuring taxation and accountability for users who profit from crypto investments. While there are debates and discussions to be held, the bill’s progress highlights the government’s growing recognition of the importance and potential of the crypto market in Kenya.
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