The Move That Will Change Crypto Policy-Making in Africa Forever
Blockchain Association of Kenya (BAK)-Inspired
May 25, 2024
Key Insights
- The Blockchain Association of Kenya (BAK) has played a pivotal role in shaping crypto policy by engaging with the government and industry stakeholders, leading to the drafting of Kenya’s inaugural Crypto Bill.
- The BAK emphasizes the importance of including industry stakeholders in regulatory discussions to ensure balanced and innovative-friendly frameworks, similar to the EU Blockchain Observatory and Forum.
- The successful implementation of BAK-inspired crypto laws in Kenya is expected to serve as a blueprint for other African nations, potentially setting a standard for comprehensive and forward-thinking crypto regulations across the continent.
Primer
Blockchain is a technology that keeps on giving, but most people have chosen to cherry-pick what they want to relate to. Even experts in the space don’t understand blockchain to the extent they can really be comfortable with it. As long as we know why we are using these technologies, only then we can use them to our benefit.
How can one technology often confused with Bitcoin have so many applications with the potential of transforming Africa?
BAK’s “change effect” is centred on three things:
When properly engaged, African governments are not the villains.
Industry stakeholders know what’s best for the space.
The first crypto laws developed will act as a model for other African states.
Let’s delve deeper into each aspect:
African Governments are not the Villains if Properly Engaged
African Central Banks have always given the use crypto “at your own risk” vibe. According to the IMF, most governments have slapped cryptocurrencies with explicit and implicit bans. Now, mainly Bitcoin and anything blockchain is viewed as a scam or a scam in the making.
But! What’s the consensus?
The IMF says that we should not ban this stuff.
In light of all of these, our leaders here in the Global South read the wrong memo. They have prioritized taxation even before they develop clear and comprehensive regulations. The outcome is that most emerging policies are undercooked. This has left a bitter taste in the tongues of most early adopters.
But guess who has found a remedy pill for this challenge?
The BAK realized that the government will often struggle to regulate what it doesn’t understand.
When Kakai said, “Kenya is a globally recognized hub of innovation, dubbed the Silicon Savannah for having one of the fastest growing technology and innovation ecosystems in Africa. We are losing the mark as a country and shedding off the pride we have built for the past decade. We need to remember who we are and nurture innovation.”
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Regardless of the potential tax revenue that technology brings, considering the broader implications on the innovative landscape is critical. Sometimes, someone must step up and hit the nail on the head of our government officials.
It has not come easy. The association has participated in a series of community engagements, thought leadership, partnerships, events, and meetups. From this, many lobbyist groups are starting to take notice of how to do it.
Industry Stakeholders Know What’s Best for the Space
The European Commission created the EU Blockchain Observatory and Forum in 2018 to address the knowledge gap and engage stakeholders. Similarly, Kenya also created a task force in 2019 to explore emerging technologies, including blockchain. What a way to carry water to the sea. Without industry stakeholders’ input, it’s meaningless.
Founded in 2016, the BAK is a “real OG” in the blockchain industry. What this experience brings to the regulatory table is unparalleled to any short-term parliamentary committees formed to inquire about cryptocurrencies. The association has engaged key stakeholders from Developers to Financial Institutions to Media. This diversity of thought is crucial to developing a balanced regulatory framework that does not thwart innovation.
Other industry stakeholders that are doing tremendous work pushing the blockchain agenda forward:
Crypsense Academy: Leads digital asset management education.
Africa Blockchain Center: Engage, research and train to accelerate the pan-African blockchain revolution.
Stakeholders in Blockchain Technology Association of Nigeria (SiBAN): Champions blockchain regulations, changes, and advocacy.
Africa Blockchain Institute: Encourage the adoption, development, and application of Blockchain Technology.
United Africa Blockchain Association (UABA): Educate, build, and empower the adoption of blockchain technology.
Sadly, innovation and regulation take place in separate rooms, resulting in this unnecessary competition.
Fortunately, there is light at the end of the tunnel when industry stakeholders are at the forefront of crucial regulatory milestones.
The first BAK-Inspired Crypto Law will act as a Model for Other African states
The United Nations (UN) Africa Renewal reported that Africa might become the next cryptocurrency frontier. In response, notable African nations have taken notable moves towards crypto legislation. Nigeria, South Africa, Mauritius, and Kenya are leading the way in cryptocurrency legislation.
Even so, it is unheard of that an industry stakeholder has been tasked to formulate a crypto-related law. In such a law, we should expect pressing regulatory aspects such as definition and classification, licensing and registration, consumer protection, etc. addressed.
Should we opt for a wait-and-see strategy or proactively dive into the currents of change?
Nonetheless, the success of the BAK’s draft proposal and its subsequent successful implementation will hallmark great milestones that will challenge policymakers both locally and internationally. A harmonized and forward-thinking approach to blockchain governance resulting from this law will offer a blueprint for future laws.
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