The financial watchdog of Uganda is urging the Government to immediately formulate crypto regulations. For this purpose, the Financial Intelligence Authority (FIA), which is the financial authority, has recommended the name of the Finance Ministry to the Government for preparing the required regulations. FIA aims to supervise and establish its control over the local crypto industry and the exchanges associated with the industry. The regulation issue has once again triggered in Uganda when FIA noticed that majority of crypto exchanges are deliberately not paying attention to the requirement of obtaining licenses and registrations.
Many of the African countries are major crypto players where crypto adoption is on fire. For instance, Nigeria is the top country within Africa and one of the top crypto adopters worldwide as well. Similarly, the situation of rising of crypto in Uganda is also on the boom. The industry has doubled over the past one and a half years. Although the country is still an under-progress country, yet in terms of crypto adoption, it competing with a few European countries.
However, there is a lack of legal framework in Uganda with regard to crypto space. However, FIA, which is the governing authority supervising the matters of financials, had earlier issued some guidelines. These guidelines were for crypto and local and foreign crypto exchanges operating the country were asked to ensure compliance. Though few had complied with, obtained licenses, and got them registered, yet the majority remained non-compliant.
Now the authority is of the view that it is time to adopt a strict approach towards the local crypto industry. In this context, FIA has duly requested the Government in charge to immediately introduce regulations covering crypto and exchanges. The Authority further recommended the Government assign the task of crypto regulation to the country’s Finance Ministry.
Thereafter, an official statement was also made on behalf of FIA through its ED, Sydney Asubo. Asubo said that the authority is of the view that the matter of crypto should be dealt with at the governmental level. He explained that FIA has noticed that the majority of Ugandan crypto exchanges are now falling under the 16th category. This is a category where the exchanges are considered highly vulnerable to misuse and abuse. For instance, they could be used for terror financing and money laundering suggested Asubo.
Asubo told further that last month the authority had reminded crypto exchanges. However, in response, only a couple of exchanges had complied while the majority have deliberately failed. In these circumstances, it is essential that the Government itself take charge of the situation and formulate a very forward, advised Asubo.
However, one cannot ignore the argument of FIA that even in the past Ugandans have been immensely victimized by crypto criminals.