Uganda

**Report on the Current Status of Retail Cryptocurrency Trading in Uganda**

**Date:** 2025-06-26

**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. Identified Current Status:**

Gray-Zone

**2. Detailed Narrative Explanation:**

Retail cryptocurrency trading in Uganda exists in a "Gray-Zone" due to a complex and somewhat contradictory regulatory landscape. While not explicitly banned for individuals to buy, sell, or hold, the Ugandan government and its financial regulatory bodies have issued strong warnings and have not licensed any entities to operate cryptocurrency businesses or facilitate such transactions. This creates an environment of ambiguity and risk for retail traders.

The Bank of Uganda (BOU) has consistently stated that cryptocurrencies are not recognized as legal tender in the country. It has warned the public about the risks associated with digital currencies, including volatility and the potential for illicit use. Furthermore, the BOU has directed licensed financial institutions, particularly those under the National Payment Systems Act, 2020, to refrain from facilitating cryptocurrency transactions, including converting crypto to mobile money and vice versa. This stance was reinforced by a 2023 High Court ruling where Justice Ssekaana Musa declared that cryptocurrencies are illegal under Uganda's current legal regime unless formally recognized by the BOU, and cannot be accepted as a means of payment. The ruling affirmed the BOU's directives barring licensed institutions from converting crypto to mobile money or vice versa.

Despite these restrictive measures and warnings, crypto trading itself is not explicitly prohibited for individuals. Ugandans continue to engage in peer-to-peer (P2P) crypto transactions, often utilizing mobile money and bank transfers for these informal trades. This indicates a level of de facto allowance, albeit in an unregulated and unprotected space. International cryptocurrency exchanges also appear to be accessible to Ugandan traders, provided the platforms support users from Uganda.

There are indications that the Ugandan government is aware of the significant volume of cryptocurrency transactions occurring within the country and is contemplating a regulatory framework. In January 2025, the State Minister for Planning, Amos Lugoloobi, revealed that over 2.5 trillion Ugandan Shillings (approximately $700 million) in crypto transactions were conducted in Uganda, highlighting the scale of this unregulated sector. There are also reports of a private member's bill being considered by the Capital Markets Authority (CMA) to regulate cryptocurrencies as virtual assets. However, as of mid-2025, no formal regulatory framework for cryptocurrencies has been established, and no licenses have been issued for crypto-related services.

The Financial Intelligence Authority (FIA) of Uganda has also expressed concerns about the risks of money laundering and terrorism financing associated with unregulated cryptocurrencies and has called for the development of a legal framework.

This situation creates a "Gray-Zone" because:
*   **No Explicit Ban on Individual Activity:** Individuals are not legally barred from buying, selling, or holding cryptocurrencies.
*   **Strong Regulatory Discouragement and Restrictions:** The central bank actively discourages crypto use, does not recognize it as legal tender, and prohibits licensed financial institutions from facilitating crypto transactions.
*   **Lack of Investor Protection and Licensing:** There are no licensed or regulated crypto exchanges or service providers in Uganda, meaning users lack consumer protection and legal recourse in case of fraud or loss.
*   **Ongoing Informal Trading:** Despite the official stance, P2P trading persists.
*   **Potential Future Regulation:** There are discussions and preliminary steps towards establishing a regulatory framework, but the timeline and nature of such regulations remain uncertain. Some experts anticipate that a crypto law in Uganda might only materialize after Kenya passes its Virtual Asset Service Providers (VASP) Bill, potentially not before 2027.

Therefore, while retail trading is happening, it operates outside the formal, regulated financial system, carrying significant risks for participants due to the lack of legal clarity and consumer protection.

**3. Specific, Relevant Text Excerpts:**

*   **Bank of Uganda (via New Vision, June 2025):** "Cryptocurrencies are currently not recognised as legal tender in Uganda. The Bank of Uganda (BOU) has repeatedly warned the public about the risks of digital assets and maintains that no company or individual is licensed to offer crypto services within the country."
*   **High Court Ruling (via New Vision, June 2025, referencing a 2023 ruling):** "Justice Ssekaana Musa declared cryptocurrencies illegal under Uganda's current legal regime, stating that unless the BOU formally recognises them, they cannot be accepted as a means of payment. The ruling cemented the BOU's earlier directives, which barred institutions licensed under the National Payment Systems Act, 2020, from converting crypto to mobile money or vice versa."
*   **Bitcoin.com (2025):** "Yes, crypto trading is legal in Uganda, although the government has issued warnings about the risks. Traders should stay updated on any potential regulatory changes."
*   **Monitor (June 2025):** "Cryptocurrencies are not recognised as legal tender in Uganda, and the regulatory environment is marked by caution and uncertainty. Despite these restrictions, crypto trading is not explicitly banned. Peer-to-peer exchanges and informal trading continue, with Ugandans able to buy and sell cryptocurrencies using local payment methods such as mobile money and bank transfers."
*   **New Vision (June 2025, quoting State Minister Amos Lugoloobi, Jan 2025):** "In January 2025, planning state minister Amos Lugoloobi revealed that over 2.5 trillion shillings (approximately $700 million) in crypto transactions were conducted in Uganda, underscoring the size of the unregulated sector. 'Bitcoin is already being widely used in Uganda, and yet these transactions are not monitored or managed because there is no regulatory oversight,' Lugoloobi admitted."
*   **Ministry of Finance, Planning & Economic Development (October 2019):** "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."
*   **Bank of Uganda (via Remitano, referencing a BOU circular):** "This is to inform you that the Bank of Uganda has not issued any licenses to any institutions to sell or handle the trade-in of cryptocurrencies. This is consistent with the official government viewpoint, which the Ministry of Finance, Planning, and Economic Development stated in October 2019."
*   **CIPESA (October 2023):** "Currently, there is no recognized cryptocurrency as legal tender in Uganda, and neither are there any licensed organizations in Uganda to sell or facilitate the trade in cryptocurrencies."
*   **Zawya (June 2025, quoting Louis Kizito, a Kampala-based commercial lawyer):** “We anticipate a crypto law in Uganda only after Kenya passes its VASP Bill. The earliest that could happen is 2027,” he predicted."

**4. Direct, Accessible URL Links to Sources:**

*   https://bitcoin.com/news/best-crypto-exchanges-in-uganda/ (Note: While this is a commercial site, it reflects the general understanding of the de facto situation. The warnings it mentions are corroborated by primary sources.)
*   https://www.newvision.co.ug/category/news/delay-to-embrace-cryptocurrency-reforms-wil-NV_190762 (Content from June 19, 2025)
*   https://www.monitor.co.ug/uganda/oped/commentary/borrow-a-leaf-on-crypto-regulation-4660076 (Content from June 18, 2025)
*   https://www.zawya.com/en/business/fintech/east-africas-divergent-crypto-paths-to-chaos-or-innovation-z0xqz5d5 (Content from June 25, 2025)
*   https://upay.africa/blog/crypto-adoption-around-the-world-uganda (Content from December 11, 2024, reflects the ongoing stance)
*   https://www.finance.go.ug/sites/default/files/Publications/Public%20Statement%20on%20Crypto-Currencies.pdf (Original PDF statement from October 1, 2019)
*   https://remitano.com/forum/ng/post/19030-uganda-cb-orders-authorized-firms-to-halt-crypto-related-transactions-pakistan-set-up-committees-to-consider-crypto-regulation (Article referencing BOU circular)
*   https://cipesa.org/wp-content/files/CIPESA_Policy_Brief_on_Cryptocurrency_and_Regulation_in_Uganda_October_2023.pdf (Policy Brief from October 2023)
*   https://watchdoguganda.com/news/business/20230424/150140/cryptocurrency-trading-is-still-illegal-in-uganda-high-court-rules.html (Report on High Court ruling, April 24, 2023)