Bank Of Uganda Invites Cryptocurrency Firms To Discuss Technical Details With Central Bank

The Bank of Uganda advised members of the Blockchain Association of Uganda to better understand the cryptocurrency industry. The bank said it would be happy to work with crypto platforms in its upcoming Regulatory Sandbox.

He referred to a meeting between the two parties early last month in a letter to Kwame Rugunga, the Uganda Blockchain Association (BAU) chairman, dated June 1st. According to the central bank, the group should improve regulations before a further discussion on technical issues.

The previous regulatory framework

In June 2021, the central bank developed a regulatory framework that allowed FinTech companies in the country to test various financial solutions. But, the testing phase will take place in a controlled environment while hoping to grow Uganda’s adoption of e-payments and other digital solutions.

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But it seems that the BOU is no longer too favorable to cryptocurrency. Surprisingly, the BOU published a recent letter stating its views on Bitcoin and the entire crypto industry.

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Earlier this year, in April, the bank issued a warning against cryptocurrencies. He said payment gateways that allow cryptocurrency transactions and payments would further increase the opportunities for crypto scams and money laundering.

Furthermore, he said that citizens should refrain from using cryptocurrencies and cryptocurrency exchanges like Binance, OkCoin, Changelly, Coinmama, or CEX. Additionally, the statement revealed that financial firms and fintech firms providing cryptocurrency solutions would lose their licenses.

The main reason for the initial ban was that, according to the statement, many citizens have lost millions to crypto scams.

Hope for Cryptocurrency in Uganda and Africa

Ugandans are not entirely losing access to crypto. Users can buy, trade and save cryptocurrencies. But crypto is still unregulated and currently no crypto firm in the country has a license to do business in the country.

The digital asset industry has become more accepted and adopted around the world. As a result, the African growth of the industry is also soaring.

This growth is attracting many cryptocurrency companies and venture capitalists. Interestingly, crypto adoption in Africa has increased by 1,200% from 2020 to 2021. For example, in Uganda, at least 2% of citizens use cryptocurrency.

The cryptocurrency market remains in the green zone | Source: Total Crypto Market Cap at TradingView.com

The speed of crypto adoption is also sweeping many countries around the world. In 2021, El Salvador became the first country to facilitate Bitcoin as legal tender. Other countries are also showing strong support for cryptocurrency.

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For example, KenGen, one of Kenya’s energy companies, encouraged Bitcoin miners to come to the country and use its geothermal energy.

This effort can increase revenue for the Kenyan government via crypto taxes and mining fees. Thus, Uganda and other African countries aim to advance their economies by accepting cryptocurrencies.

Featured image from Pexels, chart from TradingView.com



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Bank Of Uganda Invites Cryptocurrency Firms To Discuss Technical Details With Central Bank


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