Uganda Could Become the First African Nation to Regulate Bitcoin
The United Nations African Institute for the Prevention of Crime and the Treatment of Offenders (UNAFRI) which focuses on criminal justice issues, recently released a report [PDF] providing direction on bitcoin regulation in Uganda.
After the first ever Round Table discussions in Naguru, Kampala held on 7 July 2016, the UNAFRI highlighted the policy, legal, ethical and social-cultural issues around the regulation of digital currencies.
The event was convened by Dr. Maureen Mapp of the University of Birmingham Law School with the support of the Central Bank of Uganda, UNAFRI, and the African Centre for Cyberlaw and Cybercrime Prevention (ACCP).
The aim of the discussion was to create awareness about the use of digital currencies such as bitcoin in Uganda and to develop instructive guidance on effective ways with which to regulate this new form of digital currency in the country.
Given the amount of decentralized digital currencies available such as Bitcoin, Ethereum, Litecoin, Ripple, and Dash, to name a few, the focus was on bitcoin simply because of its choice for conducting a range of transactions in Africa including those in Uganda, South Africa, Nigeria, and Ghana.
Earlier this year, a technology lawyer at global financial law firm Norton Rose Fulbright discussed the legality of bitcoin in South Africa.
However, should the effort to regulate bitcoin in Uganda come into effect, it would be one of the first African countries to do so. And yet, while the continent is illustrating a growing interest in the digital currency it does so at a much slower pace compared to other countries.
Efforts to regulate bitcoin in Uganda come after a survey that Dr. Mapp conducted in 2015 for the Commonwealth Secretariat [PDF]. Drawing on online sources and social media, the survey established that bitcoins were being mostly used in Uganda by individuals, charities, and businesses, albeit in a regulatory vacuum.
However, while other countries were taking active steps regarding bitcoin and its regulatory status, the African continent was adopting a ‘wait and see’ approach. As such, this method has given no guidance or strategy on the ways of harnessing the benefits of digital currencies while mitigating associated risks.
Not too long ago, the South African Reserve Bank warned people against the use of bitcoin after conducting a bitcoin trial. Despite this, though, many realize the benefits that the currency can bring to societies.
Among the outcomes from the discussion is a think tank on ‘technological, policy, pluralist, ethical and legal issues that inform and influence the regulation of cryptocurrencies.’
Next Steps?
This discussion, however, was only the first step in helping to pave the way for bitcoin regulation in Uganda.
The next steps include setting up another date, which is set to take place on the same date in 2017. For the time being, though, Uganda is experiencing heightened activity for future regulation of bitcoin, and that can only be a good thing.
Featured image from Shutterstock.
