Bank of Uganda (BoU) Welcomes Crypto Businesses into its Regulatory Sandbox – The Bank of Uganda (BoU) has stated in a correspondence with the Blockchain Association of Uganda that it is open to explore crypto firms for inclusion in the bank’s regulatory sandbox.
Mr. Andrew Kawere, Director of the Bank of Uganda’s National Payments Service, wrote to Mr. Kwame Rugunda, Chairman of the Blockchain Association of Uganda, in an email:
“The Bank of Uganda (BoU) appreciates your offer to share information with our technical teams about crypto business models and whether particular use cases are fit for regulatory sandbox testing.”
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A Regulatory Sandbox is a controlled environment where new products or services are tested in real time. As the financial sector in Africa continues to transform, regulatory sandboxes are becoming increasingly common.
The Bank of Uganda (BoU) announced the formation of a regulatory sandbox framework in 2021, which lays out the rules and requirements for testing innovative financial solutions in a live, controlled environment.
The sandbox’s roles, according to the BoU, are as follows:
• Attract capital and funding for fintech firms
• Promote financial services innovation
• Provide shared learning opportunities for innovators and regulators
Cryptocurrencies, on the other hand, were not mentioned at the time.
The bank sent a circular to all payment service providers, particularly mobile money operators, in May 2022, reminding them to stop facilitating cryptocurrency transactions.
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Several African Central Banks have publicly announced regulatory sandboxes, including:
• South Africa
• Kenya
• Ghana
• Zimbabwe
However, Zimbabwe plans to launch a regulatory sandbox in 2021, but said cryptocurrencies, digital currencies, as well as central bank digital currencies are not eligible.
