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Kenya’s Regulatory Sandbox Will Not Accommodate Cryptocurrency Firms Says CMA

Kenya’s Regulatory Sandbox Will Not Accommodate Cryptocurrency Firms Says CMA
Kenya’s financial regulator, the Capital Markets Authority (CMA), announced that the new regulatory sandbox will not accommodate blockchain firms dealing in cryptocurrencies.
The Regulatory Sandbox in Kenya
“[…] Blockchain firms will be considered so long as they are not dealing with cryptocurrencies since the CMA’s mandate does not extend to currency. The CMA regulatory sandbox can only serve financial innovations that are directly within the regulatory perimeter of the CMA.” said the Capital Markets Authority’s chief executive Paul Muthaura, according to a report by BusinessDailyAfrica.

The new regulatory sandbox aims to offer a controlled environment for fintech firms to innovate and create financial products that protect the interests of consumers.
The regulatory sandbox has so far received interest from 70 firms that want to join. Most of these firms are in the payments sector while others are crowdfunding platforms in the real estate and health sectors. In addition, some of these firms are from outside Kenya .
The CMA recently held a validation exercise with the 70 firms of the opinions received from the public regarding the new laws guiding the sandbox. Before this, the regulator had requested for public feedback regarding the sandbox’s regulations.
In April, the Authority will issue the final guidance notice to anchor the regulations into law before officially launching the sandbox in May. CMA had previously announced to roll out the sandbox in July 2018.
An Anti-Crypto Regulatory Space
In the past, the Capital Markets Authority and the Central Bank of Kenya (CBK) have warned Kenyans to avoid participating in initial coin offerings (ICOs) and trading in cryptocurrencies respectively. These warnings were issued because investing in ICOs and cryptocurrencies poses a high risk to consumers.
“There are risks associated with cryptocurrency particularly on consumer protection, fraud, hacking and loss of data and they are prone to be used as pyramid schemes,” the CBK governor, Dr. Patrick Njoroge asserted in 2018
In one of its 2018 soundness reports, the CMA recommended that a special body is created to oversee cryptocurrencies and ICOs. The report stated : “There is a need for regulators to devise a common approach towards handling issues revolving around cryptocurrencies and ICOs. A joint workgroup by financial sector regulators could be put in place to tackle issues around cryptocurrencies and ICOs.”
In light of the upcoming regulatory sandbox, Kenyans could benefit from the platform since the market is currently flooded with fintech solutions, especially those in the mobile lending sector, which are high-risk.
The post Kenya’s Regulatory Sandbox Will Not Accommodate Cryptocurrency Firms Says CMA appeared first on BitcoinAfrica.io .

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