The central bank advised the Blockchain Association of Uganda (BAU) to sharpen its knowledge of sandbox regulations and invited its members for further technical discussions.
Bank adjusts opinion on crypto
The Bank of Uganda is open to the idea of cryptocurrency companies participating in its Regulatory Sandbox. It invites members of the Blockchain Association of Uganda (BAU) to share their knowledge with the central bank.
A letter from the bank dated 1 June to BAU chairman Kwame Rungunda refers to a meeting between the two sides in early May.
In June 2021, the bank launched a regulatory sandbox framework that allows financial technology companies (FinTech) to test “innovative financial solutions” in a controlled environment. It hoped in this way to promote the adoption of electronic payments in the country.
The recent letter appears to be a sea change in the Bank of Uganda’s approach to cryptocurrency. At the end of April, the bank warned against cryptocurrencies. It sent a message to all payment service providers in the country saying that by allowing crypto transactions, they were opening the country to money laundering and scams. It added that any provider’s financial license would be revoked.
Crypto is not banned in Uganda and can still be bought, held and traded. However, cryptocurrencies are not regulated and a company has yet to get a digital asset license to operate in the country.