The Bank of Uganda has issued a strong public warning that it has neither backed nor issued a licence to any individual or company to offer cryptocurrency services in Uganda.
According to a circular published by the Ministry of Finance, Planning, and Economic Development, members of the public were advised that the Bank of Uganda has not authorised any institution to sell cryptocurrencies or to enable the trade-in of cryptocurrencies in the country.
It is without a doubt that cryptocurrency has gained immense popularity globally with several governments either supporting the digital currency by either accepting it as a legal tender or putting up a regulatory mechanism.
African countries including Uganda are not left out of this spread of cryptocurrency. The digital asset has gained a lot of popularity in urban regions of Uganda. The need to reiterate the stance of the government came about as a result of the adverts going on across the country about crypto services.
Involvement of Banks with Crypto
The Bank of Uganda noted that many media outlets have been advertising to the public about cryptocurrency conversion to cash and vice versa. The Bank was quoted to release a statement warning banking institutions from involving themselves in any crypto-related services.
The Apex Bank in the country has not failed to mention that it will involve penalties on any erring banking entities associated with cryptocurrency. The Central Bank stated under Section 13(1)(b) and (f) of the National Payment Systems Act, 2020, the right of The Bank of Uganda to withdraw the license of any violater.
The general public is also not left out of the unyielding position of the national government about cryptocurrencies. The government through the Finance Ministry has warned about the lack of support of the government or government financial institutions for the operations of crypto-related services in the country.
The implication of this lack of support comes with the full financial risk of loss or diminishing values on the exchangers. Unlike the other national financial assets that are backed by the government, cryptocurrencies do not benefit from consumer protection.