The body in charge of providing regulation for financial services in Kenya, the Capital Markets Authority (CMA), has said that firms dealing in cryptocurrencies, will not be listed in its new regulatory sandbox.
This was confirmd by CMA’s Chief Executive, Paul Muthaura, while speaking to BusinessDailyAfrica: “[…] Blockchain firms will be considered so long as they are not dealing with cryptocurrencies since the CMA’s mandate does not extend to currency. The CMA regulatory sandbox can only serve financial innovations that are directly within the regulatory perimeter of the CMA,” he said.
The sole aim of the new regulatory sandbox is to offer a controlled environment for financial technology companies to innovate and create financial products that protect the interests of customers.
With over 70 firms already showing interest with joining the regulatory sandbox, other firms are crowdfunding platforms in the real estate and health sectors.
Authorities plan on delivering the final guidance notice in April, after seeking public opinion, this is to anchor the regulations into law before officially launching the sandbox in May.
However, the Capital Markets Authority (CMA) and the Central Bank of Kenya (CBK) in a bid to discourage Kenyans from investing in Initial Coin Offerings (ICO and cryptocurrencies, have continued to harp their reservations towards ICOs and trading in cryptocurrencies.
“There are risks associated with cryptocurrency particularly on consumer protection, fraud, hacking and loss of data and they are prone to be used as pyramid schemes,” the CBK governor, Dr. Patrick Njoroge asserted in 2018
Recall that in one of its soundness reports released in 2018, the CMA recommended that a special body be created to oversee cryptocurrencies and ICOs.
According to the released report: “There is a need for regulators to devise a common approach towards handling issues revolving around cryptocurrencies and ICOs. A joint workgroup by financial sector regulators could be put in place to tackle issues around cryptocurrencies and ICOs.”
The upcoming regulatory sandbox is bound to be of benefit to Kenyans.