Uganda may soon become one of the newest countries with an active regulation for virtual assets, this is if a private member bill that seeks to grant the country’s Capital Markets Authority the powers to regulate virtual assets succeeds.
According to reports, the Capital Markets Authority (amendment) bill 2023 is being introduced by Honourable Igeme Nathan S. Nabeta who is the ruling party National Resistance Movement (NRM) Party Chairman for Jinja District.
A bill to regulate virtual Assets issued on the Blockchain is in process. The clerk to @Parliament_Ug on 24th May wrote to @mofpedU to grant MP Nabeta Igeme a certificate of financial implication in respect his capital Markets Authority (amendment) bill 2023. @nbstv @rggoobi pic.twitter.com/xUNIlGQUvo
— Canary Mugume (@CanaryMugume) June 23, 2023
Among the objectives of the bill is to transfer power of registration of prospectuses to the CMA, including provisions for virtual and digital assets as well as tokenisation and regulatory sandboxes.
In the past few years, the Bank of Uganda has taken a leading role when it comes to the state of virtual assets and cryptocurrencies in the country.
The bank maintains its position since 2019 that cryptocurrencies remain illegal in the country and has warned payments service providers, especially mobile money operators, reminding them to desist from facilitating cryptocurrency transactions.
In 2019, the government told Ugandans that cryptocurrencies are not backed by assets or government guarantees, therefore, holders are fully exposed to the risk of loss or diminishing value as the issuers are not obliged to exchange them for legal currency or other value.
However, in June 2022, the Bank of Uganda (BoU) said it is willing to consider crypto businesses into the bank’s regulatory sandbox.
A remarkable presentation by the Chairman of Crypto Savanah and the Blockchain Association of Uganda to the Virtual Asset Working Group of the FIA. 🚀💼
The session focused on exploring best practices for regulating Virtual Asset Service Providers (VASPs) #BlockchainAssociation pic.twitter.com/tiKwjTU09s— TheFIA_UG (@ThefiaU) June 29, 2023
The private member’s bill to regulate virtual assets is widely welcomed by stakeholders and enthusiasts as a positive step given that the Financial Intelligence Authority of Uganda (FIA Uganda) had requested the Ministry of Finance to come up with a framework to help regulate cryptocurrency operations in the country.
This request came following non-compliance by various crypto operators in the country to register their operations – a call which went out in late 2020.
The bill is still in the preliminary steps towards publication for its first reading in the national assembly.
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