Ugandan High Court Rules to Uphold Central Bank’s Crypto Prohibition

Ugandan High Court Rules to Uphold Central Bank’s Crypto Prohibition – The High Court of Uganda recently dismissed a suit seeking to overturn a central bank rule prohibiting bitcoin transactions. The court’s Justice Musa Ssekaana stated in his ruling that the Bank of Uganda’s (BOU) April 2022 instruction did not violate individual property rights.

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Instead, the directive represents the central bank’s desire to avoid legalizing the “undefined system as a payment instrument in Uganda.” As previously reported in May 2022, the BOU warned parties disregarding its directive that it will not hesitate to invoke “its powers under Section 13(l) (b) & (f) of the NPS Act, 2020 for any licensees that will be found in breach of the above directive.”

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Silver Kayondo, a Ugandan crypto trader, sought redress through the High Court immediately after the decree was issued. Kayondo sought the court to overturn the central bank’s ruling as well as proclaim cryptos to be legitimate digital assets. However, in rejecting Kayondo’s motion, Justice Ssekaana stated that the BOU behaved properly when it issued the instruction.

“The applicant cannot make a claim for legitimate expectation merely because the public statement did not outlaw the same. The statement did not promise to the applicant or other stakeholders that cryptocurrencies would be allowed in Uganda or would never be regulated.”

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“Legitimate expectation relates to a promise in relation to an existing situation which will continue, or to a future benefit, advantage or course of action which the authority will follow,” Justice Ssekaana asserted. The judge also added that the BOU directive clearly states Uganda’s position with respect to cryptocurrencies and that “the context cannot be distorted to infer any benefit or promise of legality.” Ssekaana also ordered each party to bear the costs of bringing the matter before the courts.


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