The Bank of Uganda (BoU) has issued a prohibition on the use of crypto in the nation – warning its citizens about what it perceives to be the “risks” involved with investing in crypto assets.
According to a circular issued on April 29, 2022, the BoU warned its citizens about some entities advertising the conversion of cryptocurrencies into mobile money and vice versa, saying it is illegal.
The circular signed by Mr Andrew Kawere, the director of the national payments system, reads:
“Bank of Uganda has noted press reports and adverts advising the public that they can covert cryptocurrencies into mobile money and vice versa. We are also aware that such a conversion cannot happen without the participation of the payment service providers and or payment system operators. This is to advise that the Bank of Uganda has not licensed any institution to sell cryptocurrencies or facilitate the trade in crypto-currencies. This is in line with the official government position as communicated by the Ministry of Finance, Planning and Economic Development in October 2019.”
Although the BoU does not seem to have attempted to criminalise holding or trading crypto, it appears keen to shut down all businesses and brokers seeking to provide crypto-related services in Uganda. The bank also warned that anyone dealing with such cryptocurrencies would face stern consequences.
“Accordingly, this is to warn all licensed entities under the National Payment Systems Act, 2020 to desist from facilitating cryptocurrency transactions. Bank of Uganda shall not hesitate to invoke its powers under Section 13(l) (b) & (f) of the NPS Act, 2020 for any licensees that will be found in breach of the above directive,” the bank explained.
The BoU added a further warning about the dangers of investing in crypto projects and justified its move, stating that its clampdown on cryptocurrencies would “protects against risk, fraud, and scams” that ordinary Ugandans might otherwise be exposed to.
