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The Uganda crypto community was shocked to wake up to shocking news of a statement of Bank of Uganda banning crypto to fiat and fiat to crypto transactions in a letter dated 29/04/2022!
I was also particularly shocked by this news because I personally thought that the Ugandan government was conducive to crypto!
In the letter signed off by Andrew Kawere Ag. Director, it states that the Bank of Uganda has not licensed any institutions in Uganda to sell cryptocurrencies or facilitate the trade of cryptocurrencies!
This is fucking absurd as some years back we had the president of Uganda Museveni as chief guest to the opening of the Africa Blockchain Conference where CZ ie ChangPeng Zhao the CEO of Binance which is the world's biggest crypto exchange was also present.
Details of the Bank of Uganda Announcement
The statement reads
Bank of Uganda has noted press reports and adverts advising the public that they can covert cryptocurrencies 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. This is to advise that the Bank of Uganda has not licensed any institution to sell cryptocurrencies or facilitate the trade in crypto-currencies. This is in line with the official government position as communicated by the Ministry of Finance, Planning and Economic Development in October 2019.”
Although the BoU does not seem to have attempted to criminalise holding or trading crypto, it appears keen to shut down all businesses and brokers seeking to provide crypto-related services in Uganda. The bank also warned that anyone dealing with such cryptocurrencies would face stern consequences.
“Accordingly, this is to warn all licensed entities under the National Payment Systems Act, 2020 to desist from facilitating cryptocurrency transactions. Bank of Uganda shall not hesitate to invoke its powers under Section 13(l) (b) & (f) of the NPS Act, 2020 for any licensees that will be found in breach of the above directive,” the bank explained.
In that statement above, it is really confusing to the everyday crypto enthusiast as some part of the statement reads that it does not crimilaize holding crypto and the other part says those dealing with such cryptocurrencies would face stern warning!
Let me quote it below.
Although the BoU does not seem to have attempted to criminalise holding or trading crypto, it appears keen to shut down all businesses and brokers seeking to provide crypto-related services in Uganda. The bank also warned that anyone dealing with such cryptocurrencies would face stern consequences.
For the folks who studied law, what does the above statement mean to an ordinary crypto folk?
I can assure you that I am as confused as my other crypto enthusiasts in space and people are now looking for alternative ways of converting fiat to crypto and crypto to fiat that won't be criminal as the government stated!
Does it mean that people can now unleash the full power of peer to peer transactions without needing the thridaparties(exchanges) that the government wants to shutdown as stated in the circular above?
You can read the full circular of the Bank of Uganda statement from this tweet
Anyway we are all waiting for more on this development in the following days, I am closely watching and will keep giving updates on this.
Love
Jarau Moses