Uganda Warns Locals About the Risks of Crypto Investments (Report)

Bank of Uganda (the country’s central bank) reportedly alerted citizens that it has not authorized any organization to provide cryptocurrency services in the nation. As such, locals should be aware they can lose all their funds when investing in the asset class.

The Ugandan Authorities Against Crypto

A recent report revealed that despite the growing popularity of cryptocurrencies in Uganda, the domestic authorities have a rather negative viewpoint on them. For one, the country’s central bank reminded that there are no entities in the nation that have a license to offer digital asset opportunities:

“This is to advise that Bank of Uganda has not licensed any institution to sell cryptocurrencies or facilitate the trade in cryptocurrencies. This is in line with the official government position as communicated by the Ministry of Finance, Planning and Economic Development in October 2019.”

Addressing the matter was also the government of Uganda, informing that digital assets are not recognized as legal tender on local soil. Like the central bank, the ruling body has not approved any companies to provide such services.

The Ministry of Finance went further, arguing that digital assets, including bitcoin and ether, take part in illegal activities such as money-laundering, terrorist financing, and Ponzi schemes:

“The nature of cryptocurrencies makes them attractive for use in criminal transactions such as money-laundering, sale of prohibited goods and services, and fraudulent ventures such as Ponzi and pyramid schemes.”

It is worth noting, though, that bitcoin’s blockchain is entirely transparent as transactions are recorded on the digital ledger and can be seen by anyone with access to the Internet, which makes the asset highly inappropriate for illegal activities.

On the other hand, cash remains the most preferred way to facilitate illicit transactions such as drug trafficking, weapon financing, and others.

CAR Made Bitcoin Official Tender

The government of the Central African Republic has a completely opposite stance on crypto compared to Uganda. Last week, it became the second country (after El Salvador) where bitcoin is an official means of payment.

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Chief of Staff Obed Namsio raised hopes that this will place the nation on “the map of the world’s boldest and most visionary countries.”

Similar to El Salvador’s case, the International Monetary Fund (IMF) stood against the CAR’s decision. The organization warned of “large risks associated with the use of bitcoin on financial stability, financial integrity, and consumer protection.”