Uganda’s parliament is working on a bill to regulate virtual assets

Africa’s crypto policy scene is seeing increased activities, with the latest development coming out of Uganda. The country’s parliament is working on a bill to regulate digital assets and make legal provisions for tokenization in an amendment to the Capital Markets Authority Bill.

That’s according to a letter from the parliament’s clerk to Uganda’s minister of finance, planning and economic development. 

Details 

• The bill, being prepared for its first reading, is sponsored by a Member of Parliament Nathan Igeme Nabeta. 
• In the letter, the clerk of the parliament, Adolf Kasaija, asked that Nabeta be issued a certificate of financial implication. This would enable him to present the bill to the parliament. 

Key quote 

• Kasaija wrote: 

“The object of the proposed bill is to amend the Capital Markets Authority Act to…provide for virtual and digital assets [and] provide for tokenization and regulatory sandboxes.” 

Before now 

• Cryptocurrencies and other digital assets are not recognized as legal tender in Uganda. A statement issued by the country’s minister of finance on October 1, 2019, classified the activities of crypto exchanges as unregulated and illegal. 
• However, Ugandans were merely warned from transacting with cryptocurrencies. Virtual assets were not banned in the country. 
• The Bank of Uganda reiterated this stance in April 2021 circular banning financial service providers from facilitating crypto-related transactions or risk their licenses being revoked. 
• In what appeared to be a softening stance, the bank issued another circular expressing its willingness to test some crypto business models under its fintech innovative financial solutions regulatory sandbox. 

Zoom out 

• Uganda joins a growing list of countries walking back their stance on digital assets.  
• More recently, the Namibian National Assembly passed a law to regulate the industry. 
• Zambia said earlier this year that it was finishing tests on a technology to regulate digital assets. However, the Bank of Zambia had said publicly that cryptocurrencies were outlawed. 
• The Mariblock Policy page contains our complete coverage of the African blockchain and digital asset regulation developments.