By Spy Uganda
The Bank of Uganda has advised members of the Blockchain Association of Uganda to understand more about cryptocurrency sector. The bank has stated that it will be glad to work with crypto platforms in its forthcoming Regulatory Sandbox.
TMT REGULATORY ALERT: @BOU_Official has issued a circular to the @blockchainug in which it has expressed willingness to consider some crypto business models for testing under the National Payments Systems Sandbox Regulations & the @BoutiqueUganda Sandbox Framework. pic.twitter.com/JF6oOYOD2i
— KAA (Kampala Associated Advocates) (@KAAdvocates) June 2, 2022
It referenced a meeting between both parties early last month in a letter addressed to Kwame Rugunga, the Blockchain Association of Uganda (BAU) chairman, dated June 1. According to the central bank, the group should improve the regulations before another discussion on technical issues.
The Previous Regulatory Framework
In June 2021, the central bank developed a regulatory framework that enabled FinTech companies within the country to test diverse financial solutions. But, the test phase will occur in a controlled environment while hoping to develop Uganda’s adoption of e-payments and other digital solutions.
But it seems the BOU is no longer too supportive of cryptocurrency. Amazingly, the BOU released a recent letter stating its perspective on Bitcoin and the overall crypto industry.
Earlier this year, in April, the bank released a warning against cryptocurrencies. It stated that payment gateways that enable cryptocurrency transactions and payments would further increase the possibilities of crypto scams and money laundering.
Furthermore, it stated that citizens should refrain from using cryptocurrencies and cryptocurrency exchanges like Binance, OkCoin, Changelly, Coinmama, or CEX. In addition, the statement revealed that financial companies and fintech firms providing cryptocurrency solutions would lose their licenses.
The primary reason for the initial ban was because, according to the statement, many citizens have lost millions in crypto scams.