The Bank of Uganda has announced its intention to provide regulatory clarity on virtual assets and virtual asset service providers (VASPs), unveiling a proposed six-pillar foundation blueprint.
The announcement took place at the Kampala Blockchain Summit 2025, where regulators, innovators, and industry stakeholders convened to discuss the event’s theme: “From Regulation to Growth: Uganda as a Regional Hub for Virtual Assets.”
The Governor of the Bank, Michael Atingi-Ego, noted that approximately 84.5% of virtual asset activity in Uganda occurs on decentralized platforms, a figure significantly higher than the Sub-Saharan Africa average. He highlighted that this creates significant supervisory gaps, increasing the risk of market abuse and consumer exploitation.
This means that most Ugandans are users that operate in environments where supervision is technically challenging and consumer recourse is practically non-existent.
Atingi-Ego stated that Uganda is at a defining point for digital finance, and the key question is no longer centered on the relevance of blockchain and cryptocurrency; it is whether Uganda will design its own approach or follow systems developed elsewhere.
We meet at a moment when the decisions we make today will shape the structure, the safety, and the competitiveness of our economy for decades to come.”
The Six Pillars of Uganda’s Proposed Crypto Framework
The governor underscored the need for regulatory clarity and outlined a virtual asset framework built on these six core principles:
Licensing and Vetting of Service Providers
Virtual Asset Service Providers must be licensed and thoroughly vetted before commencing activity.
Client Assets Protection
Client assets must be segregated, and VASPs should maintain adequate capital reserves. Proprietary trading using customer funds is also prohibited.
Compliance With AML/ CTF
Client activity must comply with established Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulations.
Cybersecurity and Operational Resilience
VASPs must implement robust cybersecurity measures to prevent attacks, address vulnerabilities, and strengthen operational resilience.
Market Integrity
Service providers and token issuers must adhere to established rules of market integrity and refrain from insider trading or market manipulation.
Mandatory Transparency
VASPs must provide transparent, real-time transaction data and report suspicious or high-risk activity to the appropriate authorities.
Kenya Provides a Model—But Uganda Wants Its Own Path
The governor praised Kenya for its recently enacted VASP Act, which clearly outlines the responsibilities of service providers and defines the role of regulatory authorities.
He stated that while Kenya’s framework can serve as a model, Uganda should avoid a total replication but work toward a practical, functional, and unique regulatory system.
He emphasized that learning from Kenya does not diminish Uganda’s leadership potential.
Being second to legislate does not mean accepting second-tier status. Uganda does not need to follow. Uganda is ready to lead—but only if we move with urgency and quality simultaneously.
Atingi-Ego proposed that the Bank of Uganda oversee payments and stablecoin-related activities, while the Capital Markets Authority (CMA) regulates investment-linked crypto products. Both authorities would operate under a coordinated system supported by a proposed Financial Integrity Authority to strengthen oversight and risk management.
Uganda Moves From Caution to Structured Engagement
The Bank of Uganda has historically issued public warnings against using cryptocurrencies as a form of payment. In 2022, it issued a public statement that cryptocurrencies were not recognized as legal tender, warning entities dealing with cryptocurrencies to desist.
This position was also reinforced by a 2023 High Court ruling that declared cryptocurrency an illegal payment instrument.
However, the governor clarified that this stance was not rooted in resistance but in a strategic effort to protect citizens while assessing global best practices in adopting the technology.
Atingi-Edo asked at the Summit.
Our stance has not been one of obstruction, but of protection. What is conservative about protecting millions of citizens from products they may not fully understand?
During the Summit, the Bank also encouraged innovators and regulators to utilise its regulatory sandboxes, developed in partnership with the Capital Market Authority (CMA), describing them as “practical learning laboratories.”
These controlled environments enable innovators to test new products under regulatory supervision while minimizing consumer risk. They also help regulators better understand emerging technologies for the purpose of enacting comprehensive and progressive laws.
In a fireside chat, the Chief Executive of MTN Uganda, Sylvia Mulinge, emphasized that a boost in responsible blockchain innovation in Uganda would require the expansion of digital access and digital literacy:
We have to start with access. We need to get our youth online and equip them with the skills to use technology to create opportunity. Without that foundation, innovation benefits a few when it should power national transformation.
Atingi-Ego concluded his speech by stressing the need for collaboration among regulators, industry players, and innovators for effective regulation and in positioning Uganda as a regional blockchain leader.
A New Era for Uganda: From Blueprint to Action
Uganda has officially declared its shift from caution to active regulation of cryptocurrency, marking the beginning of a new era of transparent, regulated digital asset activity.
This decision is expected to usher in a wave of policy drafts, implementation timelines, multi-agency working groups, stakeholder consultations, and legislative proposals.
Uganda now joins the growing group of African nations seeking to balance responsible innovation and robust regulatory oversight.
