IMF Urges Kenya to Align Crypto Regulations with Global Standards

The International Monetary Fund (IMF) has urged Kenya to update its crypto regulations to align with global standards, addressing risks related to money laundering, terrorism financing, and consumer protection. A report highlights gaps in the country's outdated regulatory framework for digital assets.

Kenya's current laws lack authority over cryptocurrencies, exposing vulnerabilities to scams and crimes.
A recent survey indicated that 38% of respondents know someone affected by crypto scams, while 62% are aware of money laundering risks.
In February 2024, authorities issued alerts about crypto platform fraud schemes.

IMF Calls for Global Crypto Standards

Kenyan lawmakers are divided on crypto regulation. The IMF recommends a structured regulatory framework to ensure compliance with international standards and protect consumers.

“The development of Kenya’s regulatory and supervisory framework for crypto assets should be aligned with international frameworks and standards,” said IMF.

Alignment needed with protocols like the Bali Fintech Agenda and FATF guidelines.
IMF suggests a phased strategy: analyze the crypto market within 6-12 months, then develop a comprehensive legal framework beyond 12 months.
Authorities should avoid conflicting terms to ensure consistency in legal definitions.

Broader Financial Reforms

The IMF’s call for crypto regulation is part of a broader engagement with Kenya’s financial systems. In June 2024, Kenya reached a staff-level agreement with the IMF to address fiscal issues and improve debt sustainability.

By December 2024, the IMF emphasized the need for stronger fiscal policies to protect against economic shocks.