According to the Sunday Vision, Andrew Kawer the Director of National Payments at the Uganda Central bank said that despite the Central Bank’s concerns about technology risks such as consumer protection and financial inclusion, the Bank of Uganda is considering launching a digital currency.

He said, “The Bank of Uganda is currently conducting preliminary studies on whether or not to consider a Central Bank Digital Currency, in particular exploring the policy objectives it will address. Is it financial inclusion that we want to solve, is it payments, is it to support innovations in the financial field? That is an unanswered question.”

African countries have approached issues related to crypto in various ways. While countries such as Nigeria’s Central Bank banned local banks from dealing with cryptocurrency before launching its Central Bank Digital Currency, others like the Central African Republic have adopted bitcoin as legal tender.

Due to the poor prevalence of key infrastructures such as smartphones, computers, and the internet, Kawer explained that access to CBDCs may be problematic.

He also stressed that the Central Bank places a high focus on consumer protection.

He said, “In Uganda, we have low levels of digital financial literacy and the population needs a little bit of protection against some of these fairly advanced financial innovations. It could lead to financial exclusion for those who do not have access to the currency.”

On the other hand, he mentioned the bank’s concerns about the volatility of cryptocurrencies which affects its ability to act as a store of value.

Kawer also highlighted that cryptocurrencies have already been used unofficially in Uganda but the Central Bank has warned licensed payment service providers to slowly use them while the regulator studies the technology and develops regulatory mechanisms.

“So the Bank of Uganda has not banned cryptocurrencies, we have put some speed brakes on,” Kawer said.

The Sunday Vision reports that between March 2019 and March 2022, Ugandans received cryptocurrency worth around $4.8 billion.