Lawmaker Seeks to Amend Capital Markers Act to Include Digital Currency as Security
Mosop lawmaker Hon. Abraham Kirwa has proposed the amendment of the Capital Markets Act 485 A to include a digital currency into the definition of securities.
The Member who appeared before the Departmental Committee on Finance and National Planning this afternoon, told the Committee that his move is geared towards establishing a regulatory framework for trading in digital currency to protect the Kenyan citizenry interested in the trade from exploitation.
“This legislative proposal is meant to provide for governance and oversight in that area that is quickly growing, but is not adequately regulated thus exposing citizens to various risks”, he told the Committee.
According to the lawmaker, the amendment will provide for specific provisions to govern digital currency transactions in Kenya including the definition of digital currencies, its creation through crypto mining, provide for regulations around trading of digital currencies, provide for its taxation, ownership and provide for promotion of innovation in this area.
“This amendment will also ensure that environmental aspects of digital currency generation and crypto mining are done in an environmentally safe manner”, he added.
In response, the Committee Members led by the Chairperson, Hon. Kuria Kimani noted that there is need for Kenya to embrace technological innovation within the financial sector and plan for its effective regulation, rather than bury its head in the sand and have technology overrun the country’s financial system without any form of control.
The lawmakers also pointed out that it is important for country to first understand the crypto currency trade and its various risks. They noted that though the Central Bank of Kenya had not been keen in embracing blockchain technology, it was catching up with Kenya with the country ranking third most active in the trade in the African region, and with over $20 billion crypto market.
“Hon. Members, while the trade remains unclear to many Kenyans, we need to embrace the blockchain technology so as to find ways of developing a water-tight regulatory framework on it. Just like it happened with the advent of mobile money transaction (M-Pesa), this might be the future of trading across the world so we better be ready for it”, Hon. Kimani stated.
The Committee which is set to hold deliberations with the Blockchain Association of Kenya is set to review the Bill and if adopted submit it to the House for consideration.
At the same time, the Committee has received a legislative proposal from Sirisia MP, Hon. John Waluke seeking to establish the Poverty Eradication Authority.
The Bill titled, ‘The Poverty Eradication Authority Bill, 2022’, proposes to provide for an institutional framework which ensures the participation of all Kenyans in poverty reduction and economic growth.
While urging the Committee to adopt it, Hon. Waluke who noted that the Bill which was first introduced in the 11th Parliament before being reintroduced in the 12th Parliament, would provide for the coordination of national economic empowerment and poverty eradication agenda.
While interrogating the proposal, Committee Members sought to know if identication of key poverty indicators and ringfencing their funding would amount to solving the issues the Member sought to address through the proposal. The lawmakers expressed concerns that the creation of a Poverty Eradication Authority could ultimately end up being more costly as opposed to addessing key poverty indicators.
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