Overview:
The Central Bank says they have not licensed any institution to sell crypto-currencies or to facilitate the trade in crypto-currencies.
Bank of Uganda has warned all licensees under the National Payments Systems Act to desist from facilitating Cryptocurrency transactions in Uganda.
In a statement issued on April 29, 2022, the Central Bank said they have not licensed any institution to sell crypto-currencies or to facilitate the trade in crypto-currencies.
This, they said, is in line with the official Government position as communicated by the Ministry of Finance, Planning and Economic Development in October 2019.
“Bank of Uganda has noted press reports and adverts advising the public that they can covert crypto currencies 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,” the statement reads in part.
“Accordingly, this is to warn all licensed entities under the National Payment Systems Act, 2020 to desist from facilitating crypto currency transactions.
Bank of Uganda shall not hesitate to invoke its powers under Section 13(1)(b) & (I) of the NPS Act, 2020 for any licensees that will be found in breach of the above directive,” the statement adds.
The National Payments Act affects the operations of banks, Minority Depository Institutions, payment service providers, payment systems operators like Interswitch, shared banking platforms and Financial Technology companies (FinTechs).
Accordingly, this is to warn all licensed entities under the National Payment Systems Act, 2020 to desist from facilitating crypto currency transactions. Bank of Uganda shall not hesitate to invoke its powers under Section 13(1)(b) & (I) of the NPS Act, 2020 for any licensees that will be found in breach of the above directive,”
BoU STATEMENT
A cryptocurrency is an encrypted data string that denotes a unit of currency. It is monitored and organized by a peer-to-peer network called a blockchain, which also serves as a secure ledger of transactions, e.g., buying, selling, and transferring.
Cryptocurrencies run on a distributed public ledger called blockchain, a record of all transactions updated and held by currency holders.
Units of cryptocurrency are created through a process called mining, which involves using computer power to solve complicated mathematical problems that generate coins.
Cryptocurrency may be a good investment if you are willing to accept it is a high risk gamble which could pay off – but also that there is a strong chance you could lose all of your money.
It is important before investing in bitcoin or other cryptocurrencies that you go in with your eyes open.