We need a virtual asset policy to transform our financial prospect

Green Thinking Action Party (GTAP) leader Isaac Kalua. [File, Standard] Amid the political hullabaloo in Kenya and America in the last week, I noticed a draft policy that could transform Kenya's future. While political debates raged on, the surprising release of Ross Ulbricht by President Trump reignited global discussions on justice, innovation, and the influence of policy decisions. These simultaneous events underscored an undeniable truth that well-crafted policies possess the power to redefine destinies. Here in Kenya, amid the chaos I am convinced that a remarkable shift is quietly emerging - I noticed a draft policy on virtual assets and Virtual Asset Service Providers (VASPs) that holds the promise of reshaping Kenya's financial future. Progress is quietly taking root, signaling this policy's potential to reshape Kenya's financial landscape. As global financial systems evolve, Kenya stands on the brink of a transformative opportunity. Virtual assets have revolutionised traditional finance, opening pathways for innovation, financial inclusion and sustainable development. Yet, without a comprehensive policy framework for virtual assets and Virtual Asset Service Providers (VASPs), Kenya risks falling behind. This gap delays funding for well-known initiatives like Green Africa Villages and exposes Kenya to financial vulnerabilities. Virtual assets, including ethical financial instruments and scriptural money, operate in decentralised ecosystems enabling rapid, borderless transactions. Globally, they have empowered unbanked populations and driven innovation in sectors like agriculture, education and healthcare, demonstrating their transformative potential. Kenya, known for its trailblazing role in mobile money through M-Pesa, has already proven its capacity for digital financial innovation. However, the potential of virtual assets goes beyond digital payments - they can attract global investments, support entrepreneurial ventures, and fund large-scale environmental and social projects. For example, Green Africa Villages has already secured international funding through a non-traditional virtual asset-based model, underscoring the untapped opportunities in this space. Yet, without a supportive policy, scaling such initiatives becomes a daunting task. The absence of a robust regulatory framework introduces three significant risks. Firstly, virtual assets can be exploited for money laundering, terrorism financing, and fraud if left unregulated. Secondly, without safeguards, investors and users are exposed to risks from scams, data breaches and unstable platforms. Thirdly, a lack of clear policies discourages global investors and innovators from engaging with our financial ecosystem. Kenya must therefore act while others capitalise on the digital revolution. Delayed policy development is not just regulatory oversight - it's a missed opportunity to lead in Africa's virtual asset ecosystem. The European Union, Singapore and South Africa have demonstrated how strategic policies can balance innovation with security. For example, the EU's Markets in Crypto-Assets (MiCA) regulation ensures consumer protection while fostering innovation, Singapore's licensing regime enforces strict anti-money laundering measures, and South Africa proactively regulates crypto asset providers to maintain market stability. To ensure Kenya's policy is effective and future-proof, we should address the following: Firstly, include non-traditional assets like ethical instruments and scriptural money, which are driving global funding innovation. Secondly, include non-traditional assets like scriptural money and ethical financial instruments to promote inclusivity and innovation. Thirdly, create a controlled environment for piloting virtual asset projects, encouraging experimentation while mitigating risks. Fourthly, align with international standards like those of the Financial Action Task Force (FATF) and promote global cooperation. Fifth, invest in educational campaigns to build trust and understanding among consumers. Lastly, integrate policies that encourage virtual assets to fund social and environmental initiatives, aligning with the UN's SDGs. Adopting a comprehensive virtual asset policy will position Kenya as a leader in digital finance, attracting investments, fostering partnerships and safeguarding consumers. This framework will channel resources toward critical sustainable development projects while signaling to the international community that Kenya is ready to embrace financial innovation responsibly. Prioritising this policy can unlock opportunities, secure Kenya's financial ecosystem, and above all give hope to Kenyans. This is the moment to champion a transformation that will change Kenya forever. Think green, act green!

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