Uganda to Regulate Cryptocurrencies Over the Rise of Crypto-Related Pyramid Schemes

  • Uganda is reportedly going to regulate cryptocurrencies as there's been a rise of crypto-related pyramid schemes in the country.
  • The country's central bank has in the past warned citizens not to invest in cryptos.

The government of Uganda is reportedly set to regulate cryptocurrencies like bitcoin as crypto-related schemes are seemingly on the rise in the country. Several of the country’s policymakers have called on regulations to protect the public.

According to local news outlet Independent,  Uganda’s Minister of State for Finance David Bahati revealed the government is set to introduce a new bill regulating cryptocurrencies while responding to concerns raised by Members of Parliament (MPs) over the ongoing rise of unregulated pyramid schemes.

 He was quoted as saying:

In October, Cabinet approved the National Payment System Bill. We intend to bring it to Parliament next month so that it caters for all these forms of digital financial transactions.

Mathias Mpuuga, the representative of the Masaka Municipality, replied that there are “agencies dealing in crypto currency but are defrauding people,” and queried the government as to why it “would allow such agencies to operate in the country.”

Mpuuga reportedly named what he called “agencies posing as cryptocurrency dealers,” which included “Ripcoin, Namecoin and Bitcoin.” Per his words, there’s currently no legal framework to supervise these “dealers.”

He added that a pyramid scheme called Telex Free swindled various investors, including some MPs. To the policymaker, the influx of unregulated “digital currency dealers” should be addressed as a “potential bomb” the government should protect its citizens from.

Responding, Bahati claimed the government was aware of fraud cases related to cryptocurrency dealers, and reminded the parliament that earlier this year the central bank of Uganda, the Bank of Uganda, warned against trading bitcoin and other cryptos.

The Central Bank said Bitcoin and all these agencies are not under their control; we advised Ugandans to go slow and be cautious.

He added that those who trade cryptocurrencies were further cautioned not to do so on unregulated platforms. Odonga Otto, another MP, intervened to ask the Finance Ministry to “go beyond warnings and defend the population.” He was quoted as saying:

I am currently privy to a case in court of one of the pyramid schemes called D9 that has defrauded many Ugandans including some MPs yet there is no legal regime in which people can claim their money.

Notably, the cryptocurrency scene has seemingly been growing in Uganda. As CryptoGlobe covered Binance, the number one cryptocurrency exchange by trading volume, has opened a fiat-to-crypto platform in the country, which gained a massive 40,000 sign-ups in its opening week.

European Central Bank Should to Be ‘Ahead of the Curve’ on Stablecoins, Says its President

The president of the European Central Bank, Christine Lagarde, has revealed the institution is looking to accelerate its efforts when it comes to digital currencies, and to get “ahead of the curve” on stablecoins.

Her words came during her debut press conference, where she pointed out that central banks like that of Britain, Canada, and of other countries have shown interest in the digital currency space, and urged the European Central Bank to get “ahead of the curve” when it comes to stablecoins.

Lagarde revealed the ECB is set to establish clear objectives for its digital currency task force by mid-2020. She noted her personal conviction is that “given the developments we are seeing, not so much in the bitcoin segment but in the stablecoin projects,” the ECB should get “ahead of the curve.”

We’d better be ahead of the curve, if that happens. Because there is clearly demand out there that we have to respond to.

It’s been widely discussed whether the ECB should launch its own digital currency. Earlier this month a report seen by Reuters showed the central bank was planning on launching one if cash usage drops across Europe, and if the private sector fails to create an efficient solution for cross-border payments.

The report noted an ECB-backed digital currency could have “far-reaching implications” for the financial system, not only when it comes to the way monetary policy is transmitted, as it could even render commercial banks redundant as people could simply be able to open accounts directly with the ECB

It’s worth noting that former ECB president Jean-Claude Trichet has in November made it clear he is “strongly against bitcoin” and believes the central bank has been “a little complacent” towards it.

Featured image via Pixabay.