KAMPALA – Finance Minister Matia Kasaija has cryptocurrencies are not regulated and recognised in Uganda and warned the public against dealing in them.
Addressing journalists at the Uganda Media Centre in Kampala on Monday, September 30, 2019, Mr Kasaija said while hundreds of crypto-currencies such as Bitcoin and Ethereum have been designed and launched around the world, they are not recognized as legal tender in Uganda.
“This is to inform the general public that the Government of Uganda doesn’t recognize any cryptocurrencies as legal tender in Uganda. Such aren’t issued or regulated by the Government of Uganda or the Bank of Uganda,” he said.
“The government of Uganda has not licensed any organization in Uganda to sell crypto-currencies or to facilitate the trade-in crypto-currencies and so these organizations are not regulated by the Government or any of its agencies,” he added.
The minister warned that because of lack of monitoring, crypto-currencies expose the users to many financial risks.
“Most cryptocurrencies such as Bitcoin and Ethereum are not backed by assets or government guarantees, therefore holders of these crypto-currencies 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. Crypto-currencies tend to change value rapidly over time. While holders of crypto-currencies may make profits when their value rises, they will be exposed to losses when their value falls,” he added.
Mr Kasaija said many crypto currencies have been used to promote cross-border money laundering.
“The nature of crypto-currencies make them attractive for use in criminal transactions such as money laundering, sale of prohibited goods and services, and fraudulent venture such as Ponzi and pyramid schemes. In conclusion, the public is advised to appraise themselves of the risks associated with cyber-currencies, and exercise caution before they make transactions involving such products,” he added.
The Bank of Uganda (BoU) has severally spoken against trading in digital currencies because it’s outside its regulatory purview.
“Bank of Uganda warns the general public that whoever wishes to invest their hard earned savings in Cryptocurrency forms such as One-coin, Bitcoin, Ripple, Peercoin, Namecoin, Dogecoin, Litecoin, Primecoin, Blackcoin or any other forms of Digital Currency is taking a risk in financial space where there is neither investor protection nor regulatory purview,” Prof. Emmanuel Tumusiime-Mutebile, Governor, BoU, said in a press statement dated February 14, 2017.