Mosop Member of Parliament Abraham Kipsang Kirwa has introduced a new bill that could redefine the cryptocurrency landscape in Kenya. The Capital Markets (Amendment) Bill, 2023, seeks to bring blockchain, crypto and digital currencies under the regulation of Capital Markets Authority (CMA).
Notably, the bill includes a taxation framework for crypto. Where digital currency is held for under 12 months, income tax would be charged. Where it’s held for more than 12 months, capital gains tax would be charged.
Among other things, the bill wants the definition of “securities” in the Capital Markets Act expanded to include digital currencies, thus mainstreaming them. It also seeks to incorporate definitions of blockchain, cryptocurrency, crypto miner, crypto mining and digital currency.
Should the bill sail through, CMA would be handed the powers to license all new cryptocurrencies introduced in the market. Among requirements for a new cryptocurrency to be launched would be that it has been subjected to product development for at least 2 years, with the product development on a customer base of at least 10,000.
Cryptocurrency developers would be required to register with the Capital Markets Authority, keep a record of all digital currency transactions and pay taxes on any gains made from the transactions.
Should the bill become law, all entities dealing in digital currencies would have six months to register with the Capital Markets Authority.
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The figure placed Kenya at fifth in the world’s cryptocurrency ownership by the percentage of the population owning it.
The Joint Financial Sector Regulators Forum – which includes CMA, Central Bank of Kenya (CBK), Insurance Regulatory Authority (IRA), Retirement Benefits Authority (RBA) and Sacco Societies Regulatory Authority (SASRA) – in December last year issued a joint statement outlining plans to develop a framework for regulation of digital currency assets.
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