Kenyan President William Ruto announced on May 3 a fundamental shift in the country’s approach to cryptocurrencies, revealing that his government has appointed U.S. bitcoin mining company Marathon Digital as its consultant.
The move signals a departure from the previously rebellious stance of the Central Bank of Kenya (CBK) and other government entities on cryptocurrencies.
The cooperation was announced at the AMCHAM Business Summit, where high-profile figures such as US Secretary of Commerce Gina Raimondo and Kenya’s Cabinet Secretary for Investment and Trade Rebecca Miano were present.
President Ruto explained that Marathon Digital will work with the Treasury and the Ministry of Energy to meet the energy demands of cryptocurrency mining.
“Marathon Digital has been called in to consult with the Treasury on the cryptocurrency regime and the Ministry of Energy to discuss energy needs in connection with cryptocurrency mining,” President Ruto announced during a meeting with U.S. investors.
Ruto’s decision departs from the previous cautious stance on cryptocurrencies taken by institutions such as CBK under former Governor Patrick Njoroge. Njoroge strongly warned against getting involved in cryptocurrencies, suggesting that treating Bitcoin as a reserve asset would be absurd. He even stated that he should be imprisoned if such a proposal is considered.
Following Njoroge’s tenure, the Kenyan authorities have shown a willingness to explore the possibility of regulating cryptocurrencies rather than banning them altogether. They began working with organizations such as the Kenyan Blockchain Association to develop a regulatory framework. The current government has also established a working group to develop a comprehensive regulatory and monitoring framework for virtual asset service providers.
Kenya takes steps to regulate cryptocurrencies
The momentum of cryptocurrency adoption in Kenya culminated in December 2023, when a committee of the National Assembly of Kenya approved the Capital Markets Bill. If enacted into law, the bill will introduce taxation of cryptocurrency exchanges and wallets, mirroring the tax framework used for traditional banking transactions.
on April 23, NTV Kenya reported the formation of a multi-agency working group to develop rules and oversight for cryptocurrencies, also known as virtual assets, and entities dealing with them, such as virtual asset service providers.
Kenya Treasury Cabinet Secretary Prof. Njuguna Ndung’u briefed the National Assembly on the formation of the group. He cited concerns expressed by regulators about unlicensed virtual asset products and the findings of the Central Bank’s risk assessment. The assessment highlighted the money laundering and terrorist financing risks associated with virtual assets.
Kenya’s Anti-Money Laundering Report 2022 further highlighted the need for regulatory measures, identifying virtual assets and virtual asset service providers as areas requiring attention. In addition, Kenyan authorities uncovered suspicious M-Pesa withdrawals totaling at least $20 million in 2023, linked to the now-suspended iris-scanning Worldcoin project.
