Bitcoin exchange shop in Uganda (Photo: YouTube)
Uganda could become the first African nation to adopt legal regulations in the use of bitcoin in monetary transactions after hosting an event focused on the policy guidelines, legal and social-cultural issues on the use of crypto-currencies on the continent.
The Ugandan government has left the digital currency, which is owned by BitPesa of Kenya, largely un-regulated since its entry into the region’s second biggest economy in November, last year.
“The legal and regulatory environment is moving towards embracing the technology so as to harness its benefits and to promote innovation. Another concern is how to mitigate any risks in order to protect the public interests, but without stifling innovation,” Maureen Mapp, a teaching fellow at the University of Birmingham Law School who spearheaded the event, told CoinDesk.
The government through the Bank of Uganda, held the event in joint partnership with the United Nations African Institute for the Prevention of Crime and the Treatment of Offenders (UNAFRI) and the Birmingham Law School in the capital Kampala in July.
The team will hold a series of discussions with the judiciary representatives, law drafters and other stakeholders from the East African region next year, as it seeks to a fast adoption of legal guidelines in the country, EconoTimes reported.
Uganda joins Nigeria, who through the Central Bank is also stepping up efforts to regulate bitcoin to prevent money laundering, while the Central Bank of Kenya said that the cryptocurrency is illegally used in East Africa’s biggest economy, adding that its nature of transactions can be used to fund terrorism activities, Cryptocoins news reported.
The use of bitcoin has been on the rise on the continent’s leading economies of South Africa, Nigeria and Kenya, while Uganda and Ghana are also adopting the digital currency since its launch in 2008.
Its growth has however faced stiff opposition. Last year, the BitPesa took Safaricom, the biggest telecommunications company in East Africa, to court after the telecoms firm suspended its Lipisha account that it used to pay bitcoin buyers through M-Pesa.
Bitcoin, which is a form of cryptocurrency that is not controlled by a central authority unlike the national currencies is fast growing on the continent as it seeks to capitalize on the vast population that has no access to banking services in sub-Saharan Africa.