Uganda Relationship With Crypto At the Moment

Uganda Relationship With Crypto At the Moment

Although crypto popularity is increasing throughout the world, some countries remain wary of the fledgling industry and Uganda is one of those places. The government opt to remain neutral while the central bank just issued a new notice against the usage of cryptocurrencies.

According to a senior bank official, Uganda’s central bank is considering issuing a virtual currency and it has not restricted the use of crypto, although it is concerned about hazards associated with the blockchain technology, such as customer value and economic equality. Following newspaper advertisements informing traders that they can exchange bitcoin into mobile money and vice versa, the central bank stated that such transactions are prohibited unless service providers and system operators participate, according to a circular.

In the past, the bank has advised all licensed firms under the National Payments Systems Act not to facilitate crypto assets.  The organization also stated that it has not authorized any institution to offer or assist the exchange in cryptocurrency. This is consistent with the official position of the Ugandan government, as expressed by the Uganda Ministry of Finance, Planning, and Economic Development in October 2019.

However, Andrew Kawere, the bank’s director for national payments, told Reuters in an interview that the Bank of Uganda is now doing preliminary research on whether a central bank digital currency could be explored, particularly to study what policy objectives it might answer. “Is it financial inclusion that we want to solve, is it payments, is it to support innovations in the financial space? That is an unanswered question.”

Despite legislative uncertainties, the country has experienced a surge in cryptocurrency use. Although the government has repeatedly stated that digital currencies are not lawful, it has also never classified them as illegal, enabling individuals to make their own inferences about the condition of rules.

The country’s finance minister, Matia Kasaija, cautioned traders that crypto exists well outside of the nation’s rules. As a response, the minister stated that traders have no government protection and are at a constant risk losing all of their funds. Moreover, the authority added that he is afraid that the nature of cryptocurrency attracted scammers and other criminal organizations.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Jai Hamid

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