Kenya’s Finance Minister John Mbadi has said the country is preparing legislation to legalize cryptocurrencies, a shift from the government’s previous warnings against the industry.

“The emergence and growth of Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs) have given rise to innovations in the local and international financial system with dynamic opportunities and challenges,” Mbadi said, according to local news outlet The Standard.

Mbadi stressed a need for a regulatory framework to both harness the potential benefits of the industry while mitigating the risks of money laundering, terrorist financing and fraud.

“The Government of Kenya is committed to creating the necessary legal and regulatory framework to harness the opportunities of VAs and VASPs while managing the averse risks,” Mbadi said.

Kenya launched a draft policy on virtual assets and virtual asset providers in December. The draft policy aims to establish a “fair, competitive and stable market” for players in the cryptocurrency industry and promote innovation and financial literacy, Mbadi said.

Kenya has historically maintained a cautious stance towards the cryptocurrency industry. In December 2015, the country’s central bank issued a public notice warning against the use of cryptocurrency, stating that these assets were not legal tender in the country and no entity was licensed to offer money transfer services using crypto in Kenya.

Fast forward to 2022, and lawmakers in the country began considering whether to move forward with a law to tax crypto as the industry continued to grow in the country. A UN report at the time showed that about 8.5% of Kenyans owned cryptocurrencies.

CoinDesk did not hear back from Kenya’s Ministry of Finance by press time.