Tanzania, Kenya align on digital asset regulation

Dar es Salaam. Kenya and Tanzania have adopted similar approaches to digital asset taxation and oversight as both countries seek to harmonise regulations amid growing interest in cryptocurrencies across East Africa.

In 2023, Kenya introduced a 3 percent digital asset tax to formalise the crypto sector. Tanzania followed with a comparable tax structure, making them the only countries globally with such a regime.

“This legislation is not just Kenyan. It’s a pan-African framework guiding crypto standards across the continent,” said the Legal Chief at Steakhouse Financial and Director at the Kenya Virtual Assets Chamber of Commerce, Mr Allan Kakai.

Kenya has also tabled the Virtual Assets Providers Bill in parliament, aiming to establish a legal framework to support innovation while protecting investors. Kakai noted that the tax structure still requires refinement to balance compliance and growth.

The alignment reflects a regional push for consistent crypto regulations to facilitate cross-border transactions and financial inclusion. Binance Africa’s Legal Counsel, Larry Cooke, said Kenya’s progress could serve as a model for neighbouring countries.

“Kenya is on the brink of creating a legislative concept that could guide the wider eastern region,” said Cooke, adding that regulatory compliance and engagement remain key in Tanzania as well.

Chainalysis data from 2021 ranked Kenya first and Tanzania fourth globally for peer-to-peer crypto transactions. In 2024, Tanzania led in stablecoin adoption with 53 percent annual growth, while Kenya recorded a higher transaction value of about $8 billion compared to Tanzania’s $2 billion.

Despite these developments, challenges remain. Both countries must refine legal frameworks to manage risks without stifling innovation. Public awareness is also essential to combat misinformation and build trust in digital assets.

In a recent Dar es Salaam commercial court case between Yellow Card Tanzania Limited and Nyamwero Michael Nyamwero, the court ruled that the absence of specific crypto regulations does not render their use illegal. It acknowledged the evolving legal framework and recognised guidance issued by the Bank of Tanzania.

In a May report, the Bank of Tanzania urged EAC member states to assess crypto platforms and implement clear rules to curb fraud, tax evasion, and financial disruption.

The coordinated efforts by Kenya and Tanzania highlight East Africa’s ambition to become a hub for digital finance, driven by regional cooperation and regulatory clarity.