CA pushes for new tools to regulate innovations


Ezra Chiloba at a past event on August 31, 2023. PHOTO | DENNIS ONSONGO | NMG

The communications regulator is pushing for the adoption of alternative regulatory tools to oversight new and emerging innovations such as digital currencies in Kenya.

Appearing before a special committee of the national assembly, the Communications Authority of Kenya (CA) director-general Mr Ezra Chiloba said the lack of a fully operational digital currency framework poses a risk of money laundering and consumer protection.

“There is a need to develop an appropriate overarching legal framework for regulation on new and emerging technologies, including digital platforms, social media and Over-the-Top services,” Mr Chiloba said.

The parliamentary special committee was set up to inquire into the legal and regulatory compliance of Worldcoin and its local partners.

The Worldcoin saga has highlighted regulatory flaws, including the absence of a fully operationalised framework for digital currencies.

Mr Chiloba noted finding the right balance between regulation and facilitating innovations was key to growing the digital economy.

The CA, he said, has put in place a regulatory sandbox to nurture innovation as well as inform regulatory decisions and facilitate socio-economic development.

Regulatory sandboxes are a substitute for traditional regulatory tools and provide access to live testing of current digital technology products and services thus offering pertinent data for comprehending new technologies.

Sandboxes also allow regulators to receive full information on innovations and new technologies.

Plans are underway to implement this alternative regulatory tool in the ICT sector in Kenya. Public consultation on the framework for regulating sandboxes has been completed and the framework published.

CA is awaiting legislative amendment to support the regulatory sandbox. Other countries that are developing a policy on Sandbox as a regulatory tool include Rwanda, Singapore and Colombia.

A petition to the House to investigate the activities of Worldcoin triggered the ongoing inquiry on Worldcoin operations in the country.

Until its operations were stopped, Worldcoin was requiring users to provide iris scans to obtain a digital ID, also called World ID.

The firm, which unveiled its activities on July 24, required users to have their irises scanned in exchange for cryptocurrency tokens valued at about Sh7,000.

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