Uganda outlines strategy to become regional virtual asset hub
Michael Atingi-Ego, Governor of the Bank of Uganda, detailed the nation's path to becoming a regional hub for virtual assets. Speaking at the Kampala Blockchain Summit 2025, he emphasized a balanced approach of prudence and innovation.
From caution to clear regulatory intent
Uganda's historical caution towards cryptocurrencies is clarified as prudence, a deliberate pause to build understanding before establishing a clear regulatory framework.
During this period, the Bank of Uganda collaborated with regulators and the Blockchain Association to build technical capacity and study global standards.
A recent national risk assessment by the Financial Intelligence Authority revealed significant risks, primarily from limited customer due diligence and weak governance.
Notably, 84.5 percent of virtual asset activity in Uganda occurs on decentralized platforms, far exceeding the Sub-Saharan average of 63.8 percent, indicating a lack of oversight and consumer recourse.
Stablecoins, widely used for remittances, also present foreign exchange risks and monetary substitution concerns, making regulatory clarity imperative.
Kenya's blueprint and Uganda's six pillars
Uganda aims to learn from Kenya's recent implementation of the Virtual Asset Service Providers Act, a landmark for African financial regulation.
Kenya's experience demonstrates that comprehensive virtual asset legislation is achievable, adopting a functional regulatory model where the Central Bank oversees payments and the Capital Markets Authority supervises investments.
This approach provides clarity across nine categories of virtual asset activities.
For Uganda, the path forward rests on six foundational pillars: robust licensing and fit-and-proper standards, stringent client asset protection, comprehensive AML/CFT compliance, mandatory cybersecurity and operational resilience, strong market integrity and conduct, and real-time transparency and data reporting for regulators.
These pillars are crucial for safely integrating virtual assets into the financial system.
Urgency defines Uganda's digital future
Uganda faces a critical challenge in its ambition to become a regional virtual asset hub, particularly given Kenya's advanced regulatory framework.
The Governor's candid assessment highlights that aspiration alone is insufficient; concrete, urgent action is required to differentiate Uganda's offering.
While the proposed regulatory pillars are sound, their timely and high-quality implementation will be the true test of Uganda's leadership.