The Capital Markets Authority of Kenya (CMA Kenya) has said that a more encompassing approach towards crypto assets needs to be adopted to test various forms of crypto assets for future oversight.
The regulator also said that it is keen to review the CMA regulatory sandbox to allow the testing of crypto assets in partnership with other regulators including the Central Bank of Kenya (CBK).
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SEE ALSO: Only Non-Crypto Blockchain Firms to be Considered for the Kenya Regulatory Sandbox, CMA Kenya Says
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In its Q1, 2021 Capital Markets Soundness Report, CMA Kenya said:
“A more encompassing approach needs to be adopted on the broader FinTech space to onboard other financial sector regulators such as the Insurance Regulatory Authority, Retirement Benefits Authority and the
Saccos Regulatory Authority so that the success of the CMA regulatory sandbox can be extrapolated to a joint Financial Sector Regulatory Sandbox, where joint expertise from the various subsectors may be leveraged to test various forms of crypto-assets and other FinTechs to inform future oversight of the same.
Specific to crypto-assets the Authority is keen on forging a common stance and joint-messaging with the CBK going forward.”
– Capital Markets Authority of Kenya
The Soundness report highlighted the regulatory stance of SEC Nigeria and the Central Bank of Nigeria (CBN) when it comes to providing regulatory oversight on crypto-assets.
The regulator also highlighted the Chainalysis 2020 Geography of Cryptocurrency Report that showed that Kenya is among the top 5 countries in global crypto-trading activity.
CMA Kenya launched a regulatory sandbox to test out new innovations and technologies looking to enter the capital markets in Kenya. However, despite a number of blockchain projects having been accepted, the sandbox will not allow for testing of any crypto-related products.
While the report does not explicitly point to coming regulation, it does provide insight into the fact that the regulator sees the need for regulation in the crypto space and is looking to engage the Central Bank of Kenya (CBK) to see startups testing out crypto products get onboarded onto its capital markets sandbox.
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Read / Download the Q1, 2021 report here
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RECOMMENDED READING: CMA Kenya is the First Regulator in Africa to Implement a Regulatory Sandbox
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