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YellowCard calls for More Regulation of the Tech. Here’s What That May Mean in Kenya

Kenya’s crypto market is substantial, with transactions amounting to nearly $20 billion (KES 3 trillion) between July 2021 and June 2022. The country ranks third in Africa for crypto site traffic and 21st in global crypto adoption.

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Crypto fintech YellowCard has back calls to regulate the Kenyan digital asset market if the nascent and barely regulated crypto industry is to attract more investors and safeguard users’ investments.

Speaking in Nairobi on the sidelines of this year’s Africa Tech Summit, YellowCard’s Chief executive officer Chris Maurice, called on Kenya’s financial sector regulators, the CBK and the CMA in collaboration with the Blockchain Association of Kenya (BAK) to hasten the adoption of the policy which seeks to among other things, arrest pitfalls associated with swindle, prohibitive entry barriers for cryptocurrency startups, and restrictive taxation policies.

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Kenya is on track to lead in shaping cryptocurrency regulations, with (BAK) tasked by the National Assembly’s Departmental Committee on Finance and National Planning to create a “Virtual Asset Service Provider’s Bill.”

The association has since put forward the country’s inaugural Virtual Assets Service Provider (VASP) bill to govern the burgeoning market.

Also Read: Blockchain lobbyist to unveil bill on Kenyas digital asset industry/

The push for the Virtual Assets Service Provider (VASP) draft bill comes after Kenya’s lawmakers mandated the community born industry lobby group to develop a draft bill to regulate crypto assets in the country.

Its absence has seen consumers exposed to scammers as well as burdensome tax regime on digital assets.

The draft bill addresses the industry, consumer and regulator concerns by proposing a licensing framework, consumer protection framework, anti-money laundering & counter-terrorism financing (AML/CTF) and a regulatory sandbox.

The Blockchain Association of Kenya (BAK) opted to take a collaborative approach to developing the bill. The group began by running a series of policy focused community town halls in April 2023 to build momentum.

In May 2023, the group made a submission to the Departmental Committee on Finance and National Planning parliamentary committee regarding a controversial digital asset tax packaged as part of the Finance Bill 2023. Despite the submission, the bill was passed with a controversial 3% gross tax.

On August 31, 2023, the association submitted a petition to the High Court of Kenya to contest the digital asset tax amendment within Kenya’s Finance Act 2023.

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Thereafter, the group convened industry stakeholders for a policy dedicated workshop on September 19, 2023, where the members agreed to design a blueprint for Kenya’s National Digital Asset Policy.

First introduced to the public on January 22, 2024, for consultation, the bill has received a spectrum of comments ranging from favorable to unfavorable from the Kenyan digital asset industry.

Similarly, the regulators in Kenya, specifically the CBK and the CMA have generally demonstrated an active approach to regulation, in what YellowCard’s Maurice says would go along away in addressing some of the fears and concerns in the sector.

This followed the public outcry over the controversial Worldcoin digital ID crypto project, which was shut down by the government due to concerns about personal data harvesting.

“Without innovation the economy is stagnant, we continue to be part of the association on pushing adoption for the industry Kenya is a country that was founded on innovation. It’s very exciting that all the relevant regulators are working to bring more innovation to the country,” he said.

Maurice is also the firm’s co-founder alongside Justin Poiroux, who both founded the company in 2016, and has since expanded its operations to 20 countries since its 2019 launch in Nigeria.

Yellow Card is the largest and only licensed Stablecoin on and off across the Sub-African continent. Operating across 20 countries, we provide individuals and businesses of all sizes across Africa with secure, liquid, and cost-effective access to USDT, USDC, and PYUSD via their local currency directly and through our Payments API.

“There are a number of countries in the works, we will have some announcements to make this year,” said Maurice, of a potential expansion bid by the firm.

Adding that, “Going forward you should expect to see us more,

The platform makes it possible to send $USDC and other digital currencies across Africa for free and access a wide range of digital currency services. USD Coin ($USDC) is a stablecoin pegged to the value of the United States Dollar providing a secure and transparent digital representation of fiat currency.

Jointly maintained by Circle and Coinbase, two leading entities in the cryptocurrency space, $USDC ensures stability through regular audits with each token backed by an equivalent reserve of US dollars.

Built on blockchain technology, $USDC is programmable and compatible with smart contracts, facilitating its integration into various decentralized finance (DeFi) applications.

The firm was last November awarded the prestigious “AFIS Disrupter of the Year Award” at the 2023 Africa Financial Industry Summit for its outstanding contributions to innovation and resilience in the African financial sector.

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