Crypto regulation is good for the financial industry. PHOTO | POOL
The financial sector regulators’ move to form a committee that would recommend to the Treasury regulations for the crypto industry is laudable.
There have been rising fears of criminals using the platforms to launder money and finance illegal activities such as terrorism.
The United Nations Conference on Trade and Development has also warned that the crypto craze could destabilise Kenya’s financial stability if allowed to go unchecked.
While crypto backers have in the past opposed regulations, it is our position that regulating the industry could bring stability in an emerging industry characterised by wild price swings and opaque processes that some criminals use to launder money.
Regulation would protect investors from fraudulent activities that have seen people lose their crypto holdings.
Clear laws for the sector would also benefit the millions of young people who trade digital assets.
Kenya could pick lessons from jurisdictions such as the US, the UK and India that have passed some sort of laws that regulate the sector, particularly on taxation. In the US, for instance, crypto exchanges and brokers are required to notify the Internal Revenue Service of transactions.
Users are required to pay capital gain tax on earnings when they sell digital coins.
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