The Bank Of Uganda (BoU) has recently highlighted that it is now open to considering the crypto firm’s into the regulatory sandbox of the Bank.
The Blockchain Association of Uganda got the news with a lot of optimism. The Director Of Bank of Uganda’s National Payments Service, Mr. Andrew Kawere, passed the information to chairperson BAU.
The term live trial of innovative products and services in a controlled setting refers to the utilization of a Regulatory Sandbox. Regulatory sandboxes have gradually become popular as the banking sector space continues to change and emerge. The BoU announced last year that it would be working on a regulatory sandbox framework.
This framework facilitates rules and procedures that allow the test of financial innovations in a live-controlled system. The Bank further identifies some functions related to the sandbox, for instance, boosting financial sector innovations, bringing in investment money for financial technology entities, etc.
But the Bank seems to be not so friendly when it comes to cryptocurrencies as it warned all payment merchants to refuse digital assets. In Fact, several Central Banks have publicly announced regulatory sandboxes in Africa, like South Africa, Ghana, Kenya, etc.
Though the Central Bank has not completely ceased crypto but is certainly skeptical given the risks associated with the asset class.
Several African countries also seem to have varied stances when it comes to Central Bank Digital Currencies (CBDCs).
But despite all the crypto repelling, various crypto-related activities have been carried out in Uganda. Additionally, frauds and attacks are also prevalent there. A major fraud led to a crypto ban in Uganda.
But still, some risk takers would want to go all in to crypto despite the crypto transactions vulnerability. And accepting crypto business in the sandbox may be just the correct step.
And the regulatory authority can also think about how to deal with the fraud and also think about advancing the current digital assets model.
Source: https://www.thecoinrepublic.com/2022/06/17/bank-of-uganda-changes-mind-on-crypto-would-accept-them-in-its-regulatory-sandbox/