The Bank of Uganda is open to the idea of crypto firms participating in its “Regulatory Sandbox” – it has invited members of the Blockchain Association of Uganda (BAU) to share their insights with the central bank.
A letter from the bank, dated June 1, addressed to the president of the BAU, Kwame Rungunda, referred to a meeting between the two parties in early May.. The central bank also advised the country’s cryptocurrency advocacy group to get up to speed on sandbox regulations before spending time on other technical discussions.
We look forward to working with @BOU_Official and all other stakeholders in shaping the opportunity for crypto in Uganda, while proactively mitigating the potential risks and ensuring consumer protection. @CmaUganda @FitspaUG https://t.co/L8CMi4Fo5f
— Blockchain Association of Uganda (BAU) (@blockchainug) June 4, 2022
We look forward to working with @BOU_Official and all other stakeholders to shape the opportunity for crypto in Uganda, while proactively mitigating potential risks and ensuring consumer protection.
In June 2021, the bank launched a regulatory framework, or sandbox, that allows financial technology (FinTech) companies to test “innovative financial solutions” in a controlled environment in hopes of promoting adoption. of electronic payments and other digital financial services in the country.
The recent letter appears to be a 180-degree turn in the Bank of Uganda’s approach to cryptocurrencies.
At the end of April, the bank issued a warning regarding cryptocurrencies; sent a notice to all payment service providers in the country saying that by allowing cryptocurrency transactions they were opening the country to money laundering and scams.
He added that Any vendor, such as a bank or fintech company, that facilitated cryptocurrency trading would have its financial license revoked.
Cryptocurrencies are not prohibited in Uganda and can be bought, held and traded. Nevertheless, cryptocurrencies are not regulated, and a digital asset license to operate in the country has not yet been issued.
Cryptocurrency adoption in Africa is on the rise; draws the attention of many hedge funds and cryptocurrency firms. Between 2020 and 2021, the use of cryptocurrencies in Africa increased by almost 1,200% and almost 2% of Ugandans use cryptocurrencies.
Around the continent, other countries are taking a crypto-friendly approach: The Central African Republic became the first African country to adopt Bitcoin (BTC) as legal tender and only the second country to do so.
The Kenyan state power company, KenGen also invited Bitcoin miners to move to the country to buy their excess power generated from geothermal energy, which could earn their government revenue through cryptocurrency mining fees or taxes.
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Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.