The Bank of Uganda is now open to crypto companies participating in its “regulatory sandbox”, so the central Bank has now sent corresponding invitations to members of the Blockchain Association of Uganda (BAU). At the same time, this could be accompanied by a fundamental change of direction in the topic of crypto.
In a letter from the central bank to Kwame Rungunda, the chairman of the blockchain interest group, reference is made to a meeting of the two sides from the beginning of May, which laid the foundation for such cooperation. According to this, the members of the BAU should first familiarize themselves with the regulatory provisions of the sandbox, before the interest group and the central bank negotiate the technical framework conditions in a next step.
We look forward to working with @BOU_Official and all other stakeholders in shaping the opportunity for crypto in Uganda, while proactively mitigating the potential risks and ensuring consumer protection. @CmaUganda @FitspaUG https://t.co/L8CMi4Fo5f
– Blockchain Association of Uganda (CONSTRUCTION) (@blockchainug) June 4, 2022
The Bank of Uganda had already set up the regulatory sandbox in June 2021, which should enable companies from the financial technology (FinTech) to test “innovative financial services” in a controlled environment. Ultimately, this is intended to promote innovation within the country’s financial sector and to promote the spread of innovative financial services among the population.
The latest letter proves that the central bank has apparently made a U-turn in relation to cryptocurrencies.
At the end of April, the latter had explicitly warned about cryptocurrencies and issued a corresponding warning to all financial service providers in the country that they open the door to fraud and money laundering when working with crypto companies.
All banks and financial service providers were therefore even threatened with the withdrawal of their approvals, if they should still deal with cryptocurrencies.
Cryptocurrencies are actually not prohibited by law in Uganda, and can be bought, held and traded completely legally. However, the asset class is not regulated in the African country.
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