BoU Kicks Cryptocurrency Dealers Out Of Ugandan Market Over Fraudulent Deals

BoU Kicks Cryptocurrency Dealers Out Of Ugandan Market Over Fraudulent Deals

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By Spy Uganda

The Bank of Uganda (BoU) has warned all licensed entities under the National Payments Systems Act to desist from facilitating crypto-currency transactions which have seen millions of Ugandans losing their money in fraudulent ways.

“We have noted press reports and adverts advising the public that they can convert cryptocurrencies to mobile cash or the other way round. We also are aware that such a conversion cannot happen without the participation of the Payment Service Providers and or Payment System operations, “said Andrew Kawere, Acting Director, Office of the National Payments System- Bank of Uganda, in a statement and circular to all licensees, dated 29th April 2022.

The Bank of Uganda said it had not licensed any institution to sell crypto-currencies or facilitate the trade in cryptocurrencies.

In this statement, the Ministry noted the emergence of the practice of using, holding and trading crypto-currencies in Uganda.
Bank of Uganda Directives

Bank of Uganda said it shall not hesitate to invoke its powers under Section 13(1)(b) and(f) of the NPS Act 2020 for any licensees that will be found in breach of the above directive.

Bank of Uganda has warned that it does not recognize cryptocurrencies as legal tender, and thus owners of such financial assets are not protected should their holdings lose value. Also, there is no compensation should holders of such assets fail to deliver what they had promised.

Uganda’s monetary authorities added that cryptocurrencies make it easy for criminals to use such assets for money laundering, sale of prohibited goods and services, and fraudulent ventures such as Ponzi and pyramid schemes.

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