Country overview

Kenya is a large economy located in South-East Africa with 53 million people. It’s also known as an innovation and startup hub in Africa. Kenya has a robust fintech sector and a sizeable crypto community. At the same time, it is only taking its first steps in crypto regulation. Based on Umoya protocol assumption (1), about “2.7 million to 4 million cryptocurrency owners in Kenya, representing approximately 5% to 9% of the country’s population”. According to Business Daily Africa (2), the number of crypto users in the country is about four million people, or 8,3% of the local population.

According to our rating, Kenya may qualify as a jurisdiction with a considerable danger level. The country has 43.2 points (from 100) for safety level in Numbeo crime rating (3). Homicide level (4) is 4,9 per 100,000 a year.

Currently, there is no regulation for crypto payments in Kenya.

Currently, there is no regulation for crypto salaries in Kenya.

The leading crypto regulators in Kenya are The Kenya Revenue Authority (KRA), Capital Market Authority (CMA), and Central Bank of Kenya (CBK). Local regulators have reflected their crypto regulation approach in a joint communique (5) in December 2022.

The country has imposed crypto regulation in 2023. The first step in this direction was implementing crypto tax rules as a part of the Finance Act 2023 (6). In November 2023, the Kenyan parliament asked the Blockchain Association of Kenya (BAK) to prepare (7) the first version of the crypto bill. BAK includes large local crypto companies such as Binance, Yellow Card, Kotani Pay,

Also, the local parliament has introduced November 2023 an amendment to the Kenyan Capital Markets Law with a more detailed crypto taxation framework. Based on the Business Daily Africa review (8), the new law includes “the definition of digital currencies, mining and provides regulations around the trading digital currencies.” Last but not least - according to new rugulations ““Within six months of the enactment.. a person trading in digital currencies shall apply to the Authority for a licence”.

In 2022, the Central Bank of Kenya issued a Discussion Paper (9) on CBDC.

According to Cointelegraph (10), the crypto taxation framework in Kenya includes the following rules:

-Cryptocurrency held for less than a year would be subject to income tax, while capital gains tax would apply after that.

-Kenya has an income tax that ranges from 10% to 30%.

-Banks already charge an excise duty of 20% on all commissions and fees on crypto trades.

Based on PWC tax summaries (11), CIT in Kenya has a 30% tax rate and CGT - 15% rate. Julian Amboco’s Twitter (12) includes a review of the new crypto taxation framework proposal in Kenya, according to which “if a digital currency is held for <12 months, income tax applies. Where it's held for >12 months, capital gains tax applies”.

You may find more information about the crypto taxation framework in Kenya in this document (13) issued by the local tax authority - KRA.

1) Umoya Protocol Medium. The State of Crypto Regulation: Kenya

2) Business Daily Africa. Bill sets up KRA tax dragnet for 4m cryptocurrency users

3) Numbeo Crime Rating

4) Homicide Level

5) Communique on the 13th Joint Financial Sector Regulators’ Board Meeting

6) Techcabal. Kenya’s $20 billion crypto market takes the first step to regulation

7) Techcabal. Kenya’s $20 billion crypto market takes the first step to regulation

8) Business Daily Africa. Bill sets up KRA tax dragnet for 4m cryptocurrency users

9) The Central Bank of Kenya Discussion Paper on CBDC

10) Cointelegraph. Kenyan legislation establishes crypto taxation, creates consumer protections

11) PWC Taxsummaries. Kenya.

12) Julian Amboco. X (ex Twitter)

13) Kenya Revenue Authority. Brochure on Digital Service Tax