Rwanda

**Report: Retail Cryptocurrency Trading Status in Rwanda**

**Topic:** Retail_Trading_Status
**Description:** Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

**1. Current Status:** `Allowed-Regulated` (As of March 2025, moving from previously 'Allowed-Unregulated')

**2. Detailed Narrative Explanation:**

Historically, Rwanda's stance on retail cryptocurrency trading was characterized by caution and a lack of specific regulation. The National Bank of Rwanda (BNR) had repeatedly warned citizens about the risks associated with cryptocurrencies, emphasizing their volatility, potential for use in illicit activities, and the lack of consumer protection. BNR explicitly stated that cryptocurrencies are not legal tender in Rwanda, and individuals engaging with them did so entirely at their own risk. There was no formal ban on owning or trading cryptocurrencies, but the activity remained unregulated, placing the onus of due diligence and risk management solely on the individual trader.

However, the regulatory landscape has significantly shifted as of early March 2025. Recognizing the increasing use of virtual assets and the need to mitigate associated risks, particularly concerning money laundering and terrorist financing (as highlighted by the Financial Action Task Force - FATF), the National Bank of Rwanda (BNR) and the Capital Market Authority (CMA) jointly introduced a draft regulatory framework for virtual assets and virtual asset service providers (VASPs).

This new framework marks a transition from an unregulated environment to a regulated one. While individuals are still allowed to trade, the activities surrounding these transactions, particularly the service providers facilitating them, are now subject to specific rules.

Key aspects of the current (draft) regulatory environment include:
*   **Legal Status:** Cryptocurrencies remain explicitly *not* legal tender in Rwanda and cannot be used for payments.
*   **Regulation of Service Providers:** The CMA is designated as the primary regulator for the virtual assets sector. Entities wishing to offer virtual asset services (like exchanges) must now apply for a license from the CMA and meet specific requirements. This introduces oversight and compliance obligations.
*   **AML/CFT Measures:** A major driver for the regulation is mitigating financial crime risks. The framework mandates the enforcement of the 'travel rule,' requiring licensed VASPs to collect and share information on individuals involved in transactions. This directly imposes KYC/AML requirements on platforms operating legally within Rwanda.
*   **Prohibited Activities:** The draft law explicitly bans certain activities, including crypto mining, crypto ATMs, and the use of mixing/tumbling services designed to obscure transaction origins. It also prohibits the creation of tokens representing the Rwandan Franc.
*   **Consumer Protection:** While BNR's previous warnings remain relevant regarding inherent volatility, the regulation aims to enhance consumer protection by bringing transparency and accountability to VASPs. Licensed sellers will be legally obligated to deliver what they promise. Investigations into financial crimes related to virtual assets, previously complex due to the unregulated nature, will now fall under the CMA's purview for licensed entities.
*   **Ongoing Development:** The framework was released as a draft in early March 2025 for public consultation, indicating it is a new and potentially evolving regulatory space. The government aims to foster innovation within a controlled environment, balancing risk mitigation with the potential benefits of digital finance.

Therefore, while individuals can still trade crypto, they must now do so through platforms that are (or will be required to be) licensed and regulated by the CMA, adhering to specific operational and compliance standards, including KYC/AML. Trading through unlicensed VASPs carries significant legal risk, including potential fines and imprisonment for the operators.

**3. Supporting Excerpts:**

*   **(March 2025):** "The National Bank of Rwanda (BNR) and the Capital Market Authority (CMA) have introduced a draft regulatory framework for virtual assets and virtual asset service providers, a step towards governing digital financial transactions in the country...The definition extends to assets represented on blockchain or similar technologies...The framework aims to foster innovation while mitigating potential risks associated with virtual assets, prevent and mitigate money laundering and terrorist financing risks linked to virtual assets..." (Source: The New Times)
*   **(March 2025):** "Authorities are now asking virtual assets service providers (VASPs) in the country to apply for licenses from the CMA or risk prosecution...Among other provisions, the law stated that cryptocurrencies are still not admissible as legal tender in the country. In addition, crypto mining activities, crypto automated teller machines (ATMs) and VASPs providing mixing services are banned in the country...It mandated the enforcement of the travel rule among licensed VASPs and regulators, mandating exchanges to collect and share information on individuals that transact with cryptocurrencies." (Source: Mariblock)
*   **(March 2025):** "According to Article 8 of the draft law, any legal entity wishing to conduct business of virtual asset services will apply for a license to the regulatory authority (CMA) and the authority will determine requirements...When the new regulation is approved, the rules will be clear, enabling open trading of virtual assets and bringing transparency among traders. 'CMA will now take on key responsibilities, including ensuring compliance, licensing service providers, and overseeing virtual asset operations,' Twiringiyimana said." (Source: The New Times)
*   **(March 2025):** "The draft law confirms that virtual assets will not be recognised as legal tender, nor can they be used for payments within Rwanda. The proposal also bans crypto mining, virtual asset cash machines, and mixer or tumbler services." (Source: Digital Watch Observatory)
*   **(November 2024 - indicating prior intent):** "The governor of the National Bank of Rwanda (NBR), John Rwangombwa, has said that the bank is making plans to regulate the use of cryptocurrencies in the country. The regulations may come into place as early as the first quarter of 2025...He said that the NBR is partnering with the Capital Markets Authority in Rwanda to establish a crypto regulatory framework...Rwangombwa said the NBR cannot get rid of the asset class. Instead, the bank can make rules to govern its use within Rwandan borders..." (Source: Mariblock)
*   **(Historical Context - 2018):** "In 2018, the National Bank of Rwanda (NBR) regarded cryptocurrency as forbidden. 'Anyone who gets involved in the business of buying and selling digital money will do so at their own risk,' the Governor of the National Bank of Rwanda said... Rwanda has not enacted regulations or legislation specifically regulating digital currency yet..." (Source: LEX Africa / Certa Law)

**4. Source URLs:**

*   **The New Times (March 9-10, 2025):** https://www.newtimes.co.rw/article/14856/news/featured/rwanda-moves-to-regulate-virtual-assets-with-new-draft-law (Also available via search results [3], [14])
*   **Mariblock (March 10, 2025):** https://mariblock.com/rwanda-introduces-draft-regulations-for-cryptocurrencies/ (Also available via search result [4])
*   **Digital Watch Observatory (March 11, 2025):** https://dig.watch/updates/rwanda-moves-to-regulate-virtual-assets-with-new-draft-law (Also available via search result [5])
*   **Mariblock (November 25, 2024):** https://mariblock.com/rwanda-to-establish-crypto-regulations-in-2025-nbr/ (Also available via search result [6])
*   **BitcoinKE (BitKE) (March 11, 2025 - reporting on draft law):** https://bitcoinke.io/2025/03/rwanda-draft-law-regulating-virtual-assets/ (Also available via search result [10])
*   **Live Bitcoin News (March 11, 2025 - reporting on draft law):** https://www.livebitcoinnews.com/rwanda-moves-to-regulate-virtual-asset-market/ (Also available via search result [11])
*   **AInvest (March 11, 2025 - reporting on draft law):** https://www.ainvest.com/news/rwanda-introduces-draft-law-to-regulate-virtual-assets-enhance-security-23031100659d51376821987a/ (Also available via search result [12])
*   **LEX Africa (Summarizing historical context):** https://www.lexafrica.com/digital-currencies-and-services-gaining-momentum-across-the-continent/ (Also available via search result [7])