Uganda

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

**Date:** April 13, 2025

**Prepared By:** Specialized Financial Regulatory Analyst

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**Topic: Retail_Trading_Status**

**Description:** Assessment of the legal permissibility for individual citizens and residents in Uganda to buy, sell, and hold cryptocurrencies, including the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

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**1. Identified Status:**

**Gray-Zone**

**2. Detailed Narrative Explanation:**

The status of retail cryptocurrency trading in Uganda is best described as a **Gray-Zone**. While not explicitly banned for individuals in terms of simple possession or peer-to-peer trading, significant regulatory restrictions, official warnings, and lack of legal recognition create a complex and ambiguous environment that prevents it from being classified as either clearly allowed (regulated or unregulated) or outright banned.

*   **Legal Tender and Licensing:** The Ugandan government, through the Ministry of Finance, Planning and Economic Development (MoFPED) and the Bank of Uganda (BoU), has consistently stated that cryptocurrencies are not recognized as legal tender in the country. Furthermore, no organization has been licensed by the BoU or any other government agency to operate as a cryptocurrency exchange or to facilitate the buying, selling, or trading of cryptocurrencies. This lack of licensing means any platform operating within Uganda does so without formal regulatory approval or oversight concerning crypto-specific activities.

*   **Bank of Uganda Directives:** A crucial element defining the gray zone is the BoU's directive, particularly highlighted in a circular dated April 29, 2022. This directive explicitly prohibits institutions licensed under the National Payment Systems (NPS) Act, 2020 (such as banks and mobile money operators) from facilitating cryptocurrency transactions. This includes converting cryptocurrencies to Ugandan Shillings (UGX) via mobile money or other licensed payment systems, and vice versa. This effectively cuts off the primary regulated channels for converting crypto assets into local fiat currency, pushing such activities towards unregulated or informal P2P markets.

*   **Court Ruling:** A High Court ruling in *Silver Kayondo vs Bank of Uganda* (Miscellaneous Cause No. 109 of 2022, ruling delivered April 24, 2023) upheld the BoU's mandate to issue such directives to its licensees under the NPS Act. The court declared that cryptocurrencies are "illegal or unlawful" *under the current National Payment System Act* and are not accepted as a general payment instrument within that regulated framework. Importantly, the ruling also noted that the BoU "did not ban cryptocurrency but rather directed licensees under the National Payment System Act to desist from liquidating cryptocurrency." This distinction confirms that while official facilitation is blocked, the act of holding or trading itself wasn't deemed universally illegal by this ruling, reinforcing the gray zone status.

*   **AML/CFT Regulations:** Uganda's Financial Intelligence Authority (FIA) has taken steps to address money laundering and terrorism financing risks associated with crypto assets. In December 2020, the Anti-Money Laundering Act was amended to include Virtual Asset Service Providers (VASPs) as "accountable persons." This subjects them to AML/CFT obligations, including registration with the FIA, customer due diligence (KYC), and reporting suspicious transactions. However, the FIA has publicly expressed concerns about widespread non-compliance by VASPs with these registration and reporting requirements, indicating weak enforcement or oversight in practice. The FIA has called for more comprehensive crypto regulations to address these gaps.

*   **Government Warnings and Consumer Protection:** Officials have repeatedly warned the public about the risks associated with cryptocurrencies, citing their volatility, lack of backing by assets or government guarantees, and the potential for scams. They emphasize that holders of cryptocurrencies in Uganda do not benefit from any consumer protection frameworks should they incur losses or if platforms fail.

*   **Regulatory Sandbox and Future Considerations:** Despite the restrictive stance, in June 2022, the BoU invited the Blockchain Association of Uganda (BAU) to participate in its regulatory sandbox, suggesting a willingness to explore the technology and potential use cases under controlled conditions. More recently, in January 2025, the State Minister for Planning acknowledged the significant volume of unregulated crypto transactions originating from Uganda (citing sh2.5 trillion / ~$700m) and indicated that the government is considering introducing legislation to regulate the sector. This signals a potential shift from the current gray zone towards a more defined regulatory framework in the future, but as of now, that framework is not in place.

In summary, individuals in Uganda can technically acquire and hold cryptocurrencies, often through P2P methods or international platforms, but they do so at their own risk, without consumer protection, and face significant hurdles in converting crypto to fiat through regulated domestic channels due to BoU directives. The existing AML framework for VASPs appears weakly enforced, and while future regulation is being considered, the current environment remains ambiguous and restrictive without being a complete prohibition.

**3. Relevant Text Excerpts:**

*   **On Legal Tender and Licensing:**
    > "This is to inform the general public that:- a. The government of Uganda does not recognize any crypto-currency as legal tender in Uganda. b. The government of Uganda has not licensed any organization in Uganda to sell crypto-currencies or to facilitate the trade in crypto-currencies and so these organizations are not regulated by the Government or any of its agencies."
    > *Source:* Ministry of Finance, Planning and Economic Development, Public Statement on Crypto-Currencies (October 2019)

*   **On BoU Directive to Payment Providers:**
    > “This is to advise that Bank of Uganda has not licensed any institution to sell cryptocurrencies or to facilitate the trade in crypto-currencies... Bank of Uganda shall 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 contravention of the foregoing directive.” [Directive aimed at stopping conversion to/from mobile money]
    > *Source:* Bank of Uganda Circular (NPSD 306/10), April 29, 2022 (Summarized from Daily Monitor and Remitano reports)

*   **On Court Ruling:**
    > "Hon. Justice Ssekaana Musa, in dismissing the application, ruled to the effect that cryptocurrencies, under the current National Payment System Act, are illegal or unlawful and are not accepted as a general payment instrument; and that the Bank of Uganda had the mandate to issue directives to the licensees under the National Payment System... The respondent [BoU] did not ban cryptocurrency but rather directed licensees under the National Payment System Act to desist from liquidating cryptocurrency..."
    > *Source:* CIPESA, CRYPTOCURRENCY AND REGULATION IN UGANDA REPORT (Summarizing High Court ruling in Silver Kayondo vs Bank of Uganda, Misc. Cause No. 109 of 2022)

*   **On AML/CFT and VASP Compliance:**
    > "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... 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... In a recent report by the FIA, it was announced that “only a few [VASPs had] registered.”"
    > *Source:* Freeman Law, Uganda and Cryptocurrency

*   **On Lack of Consumer Protection:**
    > "As such, unlike other owners of financial assets who are protected by Government regulation, holders of crypto-currencies in Uganda do not enjoy any consumer protection should they lose the value assigned to their holdings of crypto-currencies, or should organization facilitating the use, holding or trading of crypto-currencies fail..."
    > *Source:* Ministry of Finance, Planning and Economic Development, Public Statement on Crypto-Currencies (October 2019)

*   **On Considering Future Regulation:**
    > “Using bitcoin, a lot of transactions are happening and these transactions are not being managed anywhere because they are not regulated... over $700m (equivalent to sh2.5 trillion) in transactions were reported from Uganda alone... Bank of Uganda is not responsible for them, nobody is responsible for them... [Government is considering] introducing legislation to regulate the booming cryptocurrency trade..."
    > *Source:* State Minister for Planning, Amos Lugoloobi, January 6, 2025 (Reported by New Vision)

**4. Source URLs:**

*   **Ministry of Finance Statement (Oct 2019):** [https://www.finance.go.ug/sites/default/files/Publications/PUBLIC%20STATEMENT%20ON%20CRYPTO-CURRENCIES.pdf](https://www.finance.go.ug/sites/default/files/Publications/PUBLIC%20STATEMENT%20ON%20CRYPTO-CURRENCIES.pdf)
*   **BoU Directive Summary (Daily Monitor, May 2022):** [https://www.monitor.co.ug/uganda/business/finance/bou-blacklists-cryptocurrency-in-uganda-3799694](https://www.monitor.co.ug/uganda/business/finance/bou-blacklists-cryptocurrency-in-uganda-3799694)
*   **BoU Directive Summary (Remitano, May 2022):** [https://remitano.com/forum/ng/post/18287-uganda-cb-orders-authorized-firms-to-halt-crypto-related-transactions-pakistan-set-up-committees-to-consider-crypto-regulation](https://remitano.com/forum/ng/post/18287-uganda-cb-orders-authorized-firms-to-halt-crypto-related-transactions-pakistan-set-up-committees-to-consider-crypto-regulation)
*   **CIPESA Report on Regulation & Court Ruling (Oct 2023):** [https://cipesa.org/wp-content/uploads/2023/10/Policy-Brief-Cryptocurrency-and-Regulation-in-Uganda-October-2023.pdf](https://cipesa.org/wp-content/uploads/2023/10/Policy-Brief-Cryptocurrency-and-Regulation-in-Uganda-October-2023.pdf) (Also available via search result [2] & [22])
*   **High Court Ruling (Silver Kayondo vs BoU, April 2023 - via ULII):** [https://ulii.org/ug/judgment/high-court-uganda/2023/140](https://ulii.org/ug/judgment/high-court-uganda/2023/140) (Also available via search result [16])
*   **Freeman Law Analysis (AML/FIA):** [https://freemanlaw.com/uganda-and-cryptocurrency/](https://freemanlaw.com/uganda-and-cryptocurrency/) (Also available via search result [3])
*   **FIA VASP Registration Requirement (CoinGeek, May 2021):** [https://coingeek.com/uganda-financial-intelligence-authority-calls-for-digital-currency-regulation/](https://coingeek.com/uganda-financial-intelligence-authority-calls-for-digital-currency-regulation/) (Also available via search result [19])
*   **FIA Website (General AML Info):** [https://fia.go.ug/](https://fia.go.ug/) (Also available via search result [24])
*   **New Vision Report on Govt Considering Regulation (Jan 2025):** [https://www.newvision.co.ug/category/news/govt-mulls-crypto-law-as-transactions-hit-s-NV_194196](https://www.newvision.co.ug/category/news/govt-mulls-crypto-law-as-transactions-hit-s-NV_194196) (Also available via search result [17])
*   **BoU Sandbox Invitation (CIO Africa, June 2022):** [https://cioafrica.co/bank-of-uganda-accepts-crypto-in-its-regulatory-sandbox/](https://cioafrica.co/bank-of-uganda-accepts-crypto-in-its-regulatory-sandbox/) (Also available via search result [13])

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**End of Report**