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Bank of Uganda Open To Having Cryptos in Regulatory Sandbox.

A correspondence has revealed that the Bank of Uganda is willing to include crypto businesses in its regulatory sandbox.

By Staff

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The Bank of Uganda has expressed a willingness to include crypto businesses in its regulatory sandbox through a communication with the Blockchain Association of Uganda.

Andrew Kawere, Director of the Bank of Uganda’s National Payments Service, wrote an email to the Chairman of the Blockchain Association of Uganda, Kwame Rugunda saying, 

“The Bank of Uganda (BoU) welcomes your proposal to share knowledge with our technical teams on the crypto business models and whether some use cases are suitable for testing under the regulatory sandbox.”

– Bank of Uganda (BoU)

Regulatory sandboxes are common in Africa for live testing new products or services in a controlled environment. As the financial sector in Africa continues to change, more sandboxes are expected to crop up to test the various emerging products and services. 

The Bank of Uganda (BoU) launched its regulatory sandbox framework in June 2021 to promote financial services innovation, attract capital and funding for fintech firms and provide shared learning opportunities for innovators and regulators.

With the aim of promoting the uptake of electronic payments and digital financial services, the sandbox laid out the rules and regulations for testing financial innovations with BOU providing the necessary oversight and safeguards.

Uganda’s Financial Intelligence Authority (FIA) has been urging the country’s Ministry of Finance to help formulate a regulatory framework for crypto service providers since December 2020. 

While cryptocurrencies were not explicitly mentioned at the launch of the sandbox, the Government of Uganda has since appeared to be distancing itself from cryptocurrencies. 

May 2022 saw the BOU issue a circular to all payment service providers, particularly mobile money operators reminding them to stop facilitating cryptocurrency transactions.

The circular also served as a warning to Ugandans about the risks associated with crypto trading with an additional reminder that the BOU does not recognize any cryptocurrency as legal tender.  

The intention to include cryptos in the sandbox however appears to be a more receptive move showing a willingness to open up dialogue and opportunities.  

In Africa, several Central Banks have publicly announced regulatory sandboxes, including South Africa, Kenya, Ghana and Zimbabwe.

Sourced from BitKE


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