In a letter to the association dated June 1, BOU invited members of the Blockchain Association of Uganda (BAU) to share their knowledge with the central bank. The central bank further called for the country’s crypto advocacy group to contribute towards the sandbox regulations before further technical discussions.
“Bank of Uganda invites more firms to develop and test financial innovations under the regulatory Sandbox Framework. The bank reassures the public that it is committed to safeguarding the safety and integrity of the financial system,” deputy governor Michael Atingi-Ego said.
Kwame Rugunda, the chairman of BAU, said in May that meetings between the association and the central bank had happened. Companies like Binusu, a local cryptocurrency exchange, and pioneer of legal tender to crypto exchange in Uganda, offer hope that the product is expected to grow. The company recently unveiled new features to provide users in Uganda with top-of-the-range services in cash to crypto exchange.
Binusu has for the last six years been facilitating users in Uganda to buy and sell cryptocurrencies with Uganda shillings. It currently supports nine cryptocurrencies that include bitcoin, ethereum, USDT (Tether), Celo, cUSD, BNB, SEA, BCH and LTC.
Brian Tweheyo, the chief executive officer of Binusu Exchange, says the company aims to simplify the use of cryptocurrency while building the trust and confidence of its users.
“With a new and improved trading platform and other services, Binusu is now ready to take its services to the rest of the world,” Tweheyo adds.
If the Bank of Uganda’s discussions with the Blockchain Association of Uganda on how to consider different crypto businesses within the National Payments Systems Regulations and the Sandbox Framework yield fruit, it could revolutionise the financial sector.
Blockchain insiders say the move by BoU opens the door to other players in the sector to improve their services and opens the opportunity for crypto to thrive in Uganda, while proactively mitigating the potential risks and ensuring consumer protection.
“As industry practitioners, we recognize the great opportunity that crypto presents and also recognize its related risks,” a crypto trader said.
In June 2021, the bank launched a regulatory sandbox framework allowing for financial technology (fintech) firms to test “innovative financial solutions” in a controlled environment in the hopes of promoting the uptake of electronic payments and other digital financial services within the country.
Cryptocurrency is not banned in Uganda, it can still be purchased, held, and traded. And since cryptocurrencies are not regulated in Uganda, no firm has been issued a digital asset license to operate in the country.
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