The African continent has always been one of the most favorable places for cryptocurrencies in the world. Despite the region has been facing lots of challenges from the regulators in the process of ad…
The African continent has always been one of the most favorable places for cryptocurrencies in the world. Despite the region has been facing lots of challenges from the regulators in the process of adopting cryptocurrencies, today the regulators tend to reconsider the industry as a result of the growing crypto usage.
Today there are many countries, especially in the Sub-Saharan region where crypto companies easily establish their business and gain success and Uganda is one of them.
Recently there has been a technological boom in Uganda and the main reason for this can be attributed to the thriving Fin-Tech industry in the country. Many companies started to use innovative technologies to enter some of the most profitable sectors of financial services to drive significant gains and raise financial inclusion which stands at just 58% in Uganda.
This is why a great number of start-ups for a total of 550 small businesses in Uganda start to use a revolutionary technology of Blockchain that gives people the opportunity to transact money directly with each other without any need for intermediaries.
In general, technologies in Uganda have the potential to completely change some important segments of the economy and this is especially true when it comes to Blockchain. The country has successfully adapted to new technologies and developed new business models.
And as cryptocurrencies are integrally tied to blockchain technology, it’s not really a surprise that the usage of cryptos has increased in the last few years and today this technology is widely used in both financial and non-financial applications within the country. Why is the crypto landscape thriving in Uganda?
The blockchain and crypto industry in Uganda continues to raise and the main reason for this is the simplicity for crypto companies to establish a foothold in Uganda as the country is very friendly toward investment culture and this is because there are so many investors eager for having many opportunities and therefore, it was beneficial for crypto companies to enter the Ugandan market.
In the last years, many crypto companies established their businesses in Uganda and which helped various industries in the country to succeed.
Furthermore, Ugandans already had a primary example of what trading could do for a person. The role model was Mukesh Shukla, one of the richest people in Uganda according to this article.
He had gained most of his wealth through trading and later investments in various sectors. Knowing that trading and speculation could bring such success, Ugandans were more than motivated to try their luck in these markets, even if Shukla hadn’t endorsed them.
Not surprisingly, traders involved in the foreign exchange market are the ones that enjoy the widening of the crypto landscape in Uganda the most. Having so many crypto-related opportunities helped thousands of traders and they will continue to do so well into the future.
Therefore, forex trading plays a major role in the thriving crypto landscape because cryptos are mostly anonymous and transactions made in crypto are a guarantee that your personal information is secured from online scammers. This is why using cryptos is a great option for traders to transfer and receive money. Blockchain-related regulation in Uganda
The growth of the crypto landscape pushed Ugandan blockchain associations and communities to organize various activities in the country that are related to the crypto market. In 2019 they hosted some blockchain conferences with official support from the government.
Despite the fact that currently there is no regulatory framework for the Ugandan crypto market, the government and president have a positive attitude toward crypto companies.
This can be easily noticed if we take a look at the speech of Ugandan President Yoweri Museveni at the Africa Blockchain conference that was held in May 2019. AS he said, the government needs to enable things to move faster and clearly, he meant that the government must revise the law and provide regulations to the crypto market. After that there have been several cryptos to fiat currency exchanges in the country and among them are Coin Pesa, Binance, and BitPesa.
After that, the popularity of cryptocurrencies grew so much that today even some restaurants, ordinary shops, and hotels accept payments in cryptocurrencies making Uganda stand out from other African nations.
However, still, the government hasn’t taken any further steps in this way and there is no certain regulation about cryptocurrencies in the Ugandan jurisdiction.
Regulators and lawyers believe that this sector needs both traditional and digital payment methods and they try to provide some kind of a mix of both these methods. But this is just a part of a future plan and for now, Uganda lacks regulations.
But the attempts of the government, president, and Ugandan lawyers must be praised as there is no other government on the whole African continent that has shown so much willingness to expand the use of blockchain technology.
Unlike most other countries, the Ugandan government clearly understands the number of benefits this digital technology can bring to the country and how it can take part in the advancement of the Ugandan economy.
Possible changes in the policy
Now the government of Uganda is in the process of revising policy and implementing new guidelines to encourage using blockchain technology. However, one more important thing for them is to take a good look at the existing Data Protection Bill which also requires some changes.
For now, the personal information of the customers is not strictly confidential and this is why the regulation in the market is vital to ensure the safety of Ugandan people who use cryptocurrencies as a payment option.
Also, the government is in the process of introducing a new tax system that will encourage the private sector as well to invest in blockchain technology. Doing so is essential for offering public-private partnerships new opportunities.
Finally, we can say that Uganda is one of the most favorable destinations for crypto investors because the government tries hard to encourage more investment in new startups to support the growth of cryptos and boost the economy.
Probably, thanks to the growing crypto landscape, in the next few years, Uganda will face enormous advancement in technological and economic fields.
ABOUT THE AUTHOR: Giorgi has been keeping an eye on the African crypto community for 2 years now. He is well versed in the regulatory landscapes of all major economies on the continent.