Cryptocurrencies have passed different phases in Kenya. Initially, the country’s central bank wasn’t in support of crypto trading or any transaction involving it. However, a few years down the lane, with the introduction of acts such as the National Payment Systems Act (NPSA) and the Capital Markets Acts (CMA), crypto has come under full regulation in Kenya.
If you’re curious about the impact of crypto law on iGaming in Kenya, then you’re reading the right piece. In this guide, we’ve covered important factors that can give you a good idea, including crypto tax in Kenya, Bitcoin in Kenya, and the legality of crypto in Kenya. Keep reading to find out more.
What is cryptocurrency?
Cryptocurrency is regarded as a form of digital money, but the difference between it and fiat money is that, while fiat is powered by banks and other traditional financial institutions, cryptocurrencies are powered by blockchain technology. The first cryptocurrency, Bitcoin, was introduced into the market in 2009 by Nakamoto Satoshi. Since then, many other cryptocurrencies have been launched, including Ethereum (ETH), Ripple (XRP), Litecoin (LTC), and Binance Coin (BNB).
According to Statista, in 2023, over 9,000 cryptocurrencies existed. While all coins released into the market have their different use cases, they can also be used as a medium of exchange as well as deposited to online casino sites where they are supported.
Cryptocurrency regulations
In an attempt to regulate the activities of cryptocurrency-focused companies and individuals in the country, the Central Bank of Kenya (CBK) has introduced different acts such as the Capital Markets Authority, Kenya Information and Communication Act (KICA), and the National Payment Systems Act (NPSA). With the introduction of these acts, cryptocurrency is fully regulated in Kenya.
Also, any crypto-focused company setting up in Kenya must be registered with the Central Bank. The CBK also has the sole responsibility of regulating all crypto firms in the country. However, to enforce this crypto law, punishments have been put in place to award any erring company or individual.
Is cryptocurrency legal in Kenya?
Yes, cryptocurrency is legal in Kenya. While the Central Bank of Kenya introduces acts to regulate the activities of cryptocurrency traders and companies, there are no laws prohibiting you from involving in cryptocurrencies in the country.
Crypto tax in Kenya
Initially, crypto traders in Kenya were subjected to payment of personal income tax, but since the introduction of the Finance Act of 2023, there has been a defined tax percentage on crypto transactions. Effective from September 1st 2023, there has been a 3% tax charged on crypto transactions in Kenya. Whether you’re buying, selling, swapping, or transferring, the tax rate must be paid. The tax is not based on the gains you realized from the transactions.
Bitcoin in Kenya
Bitcoin is very popular in Africa, particularly in Kenya, and it has been reported that over 6 million people own the coin in the country. It is traded on all the crypto trading platforms available in Kenya and is also accepted by most crypto online casino sites in Kenya.
Best crypto wallet in Kenya
Labeling a crypto wallet as the best in Kenya is basically subjective and depends on you as well as your preferences. However, the following are some popular options in Kenya that are generally well-regarded:
- Busha: Known for its user-friendly interface as well as ease of use, Busha is a great option for beginners. It supports a good variety of popular cryptocurrencies and allows you to buy and sell crypto with Kenyan Shillings (KES).
- Yellow Card: This is the largest licensed stablecoin on/off ramp on the African continent. It offers you a safe way to buy and sell Bitcoin (BTC) using KES. You can also store your crypto with Yellow Card’s built-in wallet.
- SpectroCoin: This platform offers a variety of features beyond just a wallet. You can store and manage cryptocurrencies, exchange them for other digital assets or fiat currencies, and even get a crypto-backed loan. While it’s a bit complex to use, it could be a good option for users who want a more all-in-one crypto solution.
Crypto card in Kenya
Crypto cards allow you to spend your crypto balance using a debit card. There are so many platforms where you can apply for the card in Kenya. The cards are powered by Visa and Mastercard, and there is usually a fee attached to the issuance of the card. Some crypto card platforms in Kenya include the following:
- ClubSwan: ClubSwan is a membership program with a crypto debit card that allows members in Kenya to spend both crypto and fiat currencies. They offer benefits like travel discounts, concierge services, and rewards programs.
- Paycent: Launched in 2016, the crypto company offers crypto card services to its users. It has a dedicated mobile app that is available in Android and iOS versions. Users in Kenya are eligible and have been constant users of the Paycent card services since it was introduced into the Kenyan market.
- Uquid: This platform was launched in 2016, and the following year, it raised over $17m in a public Initial Coin Offering (ICO). It offers crypto card services to its users worldwide, including Kenyans. The card supports over 100 coins for top-up.
How Cryptocurrency Affects iGaming in Kenya
iGaming is one of the industries that has been impacted by the introduction of cryptocurrencies. So many online casino and sports betting sites operating in Kenya now accept cryptocurrencies. It has impacted iGaming in positive and negative ways. However, the following are the ways it has affected iGaming:
- Faster transactions – deposits and withdrawals on your online casino account via crypto are generally faster than traditional currencies.
- Secured payment – transactions on the blockchain are more secure than traditional currencies. This is because nobody has control over the blockchain. All transactions are immutable and are recorded accordingly.
- Tax payment – a 3% tax payment on crypto transactions in Kenya is a thing of concern for Kenyan online gambling enthusiasts. The tax affects those who prefer using crypto for their online gaming activities.
- Money laundering concerns – regulatory bodies are worried about crypto being used for money laundry purposes in Kenya.
- Inclusion – so many people who do dont have access to a bank account or bank card can now wager on their gambling sites using cryptocurrencies.
- Market volatility: – the crypto market volatility is affecting iGaming users who prefer to use crypto for their deposits and withdrawals. Since the market is not predictable, the worth of the coin in your wallet for your gambling activities can plummet and vice-versa.
Benefits of using Crypto in iGaming
Some benefits of using crypto in iGaming include the following:
- Fast and secure transactions
- Allows you to gamble anonymously
- Lower transaction fees
- Transparency and fairness
- Many online casino sites offer specific bonuses for users who deposit with crypto
Challenges faced by iGaming platforms regarding crypto
The following are some challenges iGaming platforms face with crypto:
- Regulatory uncertainties
- Anti-money laundry and KYC concerns
- Limited adoption of crypto
- Security risk concerns
Future trends in Cryptocurrency and iGaming in Kenya
With the increase in crypto adoption and the continued growth of the iGaming industry in Kenya, more intersections of the two sectors are expected in a few years. As more Kenyans use cryptocurrencies, iGaming platforms will likely integrate more crypto payment options, enhancing user experience and attracting a lot of users due to faster transactions and lower fees.