Since cryptocurrencies are not regulated by the government or central bank, market participants trade and invest entirely at their own risk in Uganda. For this reason, cryptocurrencies are not backed by assets or government guarantees, and issuers are not required to exchange them for legal currency or other value.[1]
In December 2020, the Financial Intelligence Authority (FIA) published a letter amending the Anti-Money Laundering Act to include virtual asset service providers (VASPs) among the list of “accountable persons” subject to supervision and monitoring by the FIA.46 Executive Director of the FIA, Sydney Asubo, however, has expressed her concerns with the substantial noncompliance of market participants to the agency’s licensing requirements, exposing market participants to even greater risks of money laundering, terrorism financing, investment scams, and more. In a recent report by the FIA, it was announced that “only a few [VASPs had] registered.” [2] Consequently, the FIA of Uganda is seeking assistance from the country’s finance ministry to establish more extensive crypto regulations, particularly with regards to these crypto service providers.[3]
Cryptocurrency is not considered legal tender in Uganda, and the government has not licensed any entity to sell or facilitate the trade of cryptocurrencies as of this time.[4]
P.S. Insights on Cryptocurrency Legal Issues
Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.
Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.
However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.
Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. The globe below provides links to country-by-country summaries:
Is cryptocurrency legal in Uganda?
Do you have questions about cryptocurrency, digital currencies, or blockchain technology?
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[1] Ministry of Finance, Planning and Economic Development, The Republic of Uganda, Public Statement on Crypto-Currencies, (n.d.).
[2] Osato Avan-Nomayo, Uganda’s finance watchdog calls for crypto regulations in the country, Cointelegraph (May 24, 2021).
[3] Osato Avan-Nomayo, Uganda’s finance watchdog calls for crypto regulations in the country, Cointelegraph (May 24, 2021).
[4] Ministry of Finance, Planning and Economic Development, The Republic of Uganda, Public Statement on Crypto-Currencies, (n.d.); Ministry of Finance, Planning and Economic Development, The Republic of Uganda, Public Statement on Crypto-Currencies by the Minister of Finance, (October 1, 2021).
