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- The Crypto leash looking tight...
The Crypto leash looking tight...
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Howdy 🤠
It's Brian here 👋🏿.
In today's edition of The Daily Brief, Diaspora remittances in 2024 hit record highs.
Also, Kenafric’s US$100 million confectionery stake is up for sale by two private equity firms.
But first…
The Treasury has proposed a law to regulate cryptos…what's in it?
Top Stories
REGULATION
Inside the Cryptocurrency regulation bill
Bitcoin
A week after the Treasury formulated a proposed policy document on virtual financial assets like crypto, the state department has now published a proposed law that will determine who and how crypto firms will be licensed to operate in Kenya.
Introducing to you… 🥁🥁… the Virtual Asset Service Providers Bill, 2025.
The bill wants companies providing virtual assets to set up physical offices with documentation and records, which can be accessed by regulators - in this case, the Capital Markets Authority (CMA) and the Central Bank of Kenya (CBK).
The problem is….this is not the norm for crypto firms globally. Attuning themselves to such a provision in the Kenyan law is bound to encounter difficulties. But that's not half the foreseeable challenges…
Another provision listed in this bill is the requirement for crypto firms to appoint Kenyan executives who would be vetted and approved by the two regulatory bodies mentioned above. This could be interpreted as an ‘overreach’ by regulators - which is not so good for emerging markets.
Of course…the government believes that by enlisting these two demands in the proposed law serves to streamline the regulators’ abilities to supervise crypto-based transactions. The government says that the primary objectives of the bill is to protect clients in the crypto market from fraudulent activity, stem the tide of money laundering and terror financing…all very noble ideals.
But again! Any eagle-eyed observer would know that only a government with a deep interest in raiding nascent revenue pools would be so ardent in leashing up a market it had previously dismissed as a ‘peripheral fad’. With over 700,000 Kenyans transacting billions in crypto platforms, the taxman will need a congealed sphere this proposed law promises to provide.
The requirements may also be hard to implement due to the difference between the fast changes in the technology space and the slow pace of government policies and regulation, which often see the latter playing catch up. One obvious one is the obvious limitations in trying to control digital assets with rules borrowed from fiat and physical assets, which can be limited by physical boundaries.
ECONOMY
Diaspora Remittances hit all-time High in 2024
Diaspora inflows in Kenya over the past few years | CBK
Kenyans living in foreign countries contributed immensely to the country's forex inflows in 2024, as diaspora remittances hit an all-time high of KSh 640.8 billion. This was an 18% increase from KSh 542.4 billion in 2023.
According to data from the Central Bank of Kenya (CBK), the US was the largest source of remittances to Kenya throughout 2024, accounting for 51% of total inflows in the year. Saudi Arabia has surpassed the UK to become the second largest source of remittances, with the shift indicative of the evolving migration laws that have made it harder for Kenyans to move to European countries, while Gulf countries have become a favorable destination due to their burgeoning labour needs.
It is no surprise, therefore, when the Ministry of Labour in Kenya dedicates a bulk of its energy in sourcing job markets abroad for its citizens. It has rebuffed criticism by claiming it is better to ship millions of Kenyans overseas to work than let them languish here. Unemployment in Kenya remains a scathing issue with no viable solution in sight.
COMPANIES
Private Equity Firms Amethis & Metier to Exit Kenafric
Kenafric Manufacturers
Consumer goods conglomerate Kenafric’s US$100 million confectionery stake is up for sale by two private equity firms with the transaction spearheaded by Nedbank Group, Bloomberg reported on Friday.
The two firms – French Amethis Finance and South Africa’s Metier Private Equity Ltd – jointly acquired a 40% stake in Kenafric’s confectionery and culinary business in February 2017. The Kenyan candy maker was founded by the Shah family in 1987 with interests in confectionery, footwear, culinary and stationery manufacture. According to Bloomberg, the Shah Family might also consider scaling down its holding, enlisting Kenya’s I&M as the transaction advisor
Today's Poll
What do you think of the proposal in the new bill to have crypto firms set up local physical offices before getting licensed? |
Yesterday's Poll Results
What are your perceptions of the Kenyan economy this year?
🟩🟩🟩🟩🟩🟩 Optimistic, it will grow (71.43%)
🟨🟨⬜️⬜️⬜️⬜️ Meh! Doesn't look good (28.57%)
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Explainer
Video of the Day
I think it is not wise for an emperor, or a king, or a president, to come down into the boxing ring, so to speak, and lower the dignity of his office by meddling in the small affairs of private citizens
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