Kenya is considering adopting a blockchain-based Money Market Fund (MMF) scheme, following a recommendation from the Capital Markets Authority (CMA). This move would mirror China's successful implementation of the world's first tokenised MMF, aiming to enhance transparency and accessibility in the capital markets.

• The CMA urged Kenya to explore tokenised or blockchain investments, citing increased flexibility and stronger trust in the financial system.
• The proposed system would combine traditional fund management with blockchain technology, issuing digital tokens as proof of ownership that are trackable in real-time.
• The recent ascension of the Virtual Assets Service Providers (VASP) Bill, 2024, provides the legal framework, requiring providers to obtain a VASP licence from the CMA, be a registered Kenyan company, and comply with AML, CFT, and KYC procedures.
• Potential benefits include increased transparency and efficiency, financial inclusion, and institutional certainty, though challenges such as regulatory coordination and development of specific subsidiary regulations remain.