Uganda’s financial regulators are recalibrating their posture toward digital finance, not out of fear of innovation, but out of a conviction that careful policy design must precede mass adoption.
Speaking at the Kampala Blockchain Summit, Dr. Michael Atingi-Ego, the Governor of the Bank of Uganda, laid out a pragmatic vision for how the country should treat virtual assets if it wants to become a regional hub rather than fall behind its neighbours. He insisted that Uganda’s response must be “prudence, not hesitation,” and that regulation should enable innovation while protecting consumers and financial stability.
The governor opened his keynote by framing blockchain and tokenisation as technologies that “are reshaping how value is stored, moved and trusted,” and warned that the question for Uganda is no longer whether these technologies matter but “whether we will be architects of their adoption or mere users of systems designed elsewhere.”
Dr. Atingi-Ego was explicit that the Bank of Uganda’s earlier stance was not prohibition but cautious study. “To me, [it] is prudence, not hesitation,” he said, while publicly clarifying that virtual assets are not legal tender and that participation is at one’s own risk. The objective, he said, has always been to build understanding and technical capacity first, then draft a clear, enforceable framework.
That prudence, he said, involved sustained stakeholder consultation, cross-regulator technical work, and a recent national risk assessment of virtual asset activities. The assessment, the Governor reported, found significant risks in the Ugandan market: weak customer due diligence, poor governance, and a large amount of activity on decentralized platforms — “84.5% of the virtual asset activity in Uganda occurs on decentralized platforms,” he noted, a rate he said is markedly higher than the Sub-Saharan average of 63.8%. Those patterns, he warned, create environments where supervision is technically challenging and consumer recourse is practically non-existent.
Stablecoins, while useful for remittances and cross-border payments, bring foreign-exchange risks and can encourage monetary substitution where Ugandans hold value in foreign-peg digital instruments, rather than in Uganda shillings, he warned.
Rather than advocate a ban, Dr. Atingi-Ego argued that outright prohibition simply drives activity underground, increasing fraud and reducing transparency — a lesson he said Kenya’s recent reforms reinforced.
He pointed to Kenya’s Virtual Asset Service Provider Act, 2025, as a “real turning point” and a continental milestone, offering three lessons: that African countries can craft robust laws, that functional regulatory models (dividing oversight by economic use-case) work, and that delay carries costs in the form of fraud, consumer losses, and limited visibility for authorities.
“Uganda can learn from that experience without imitating it wholesale,” he remarked.
From those lessons, the Governor proposed a practical blueprint for Uganda’s legal and supervisory architecture. Any framework, he said, should rest on a six-pillar architecture for a safe virtual-asset ecosystem:
- Licensing and fit-and-proper standards to ensure that operators meet governance, integrity, and capital tests.
- Client asset protection to segregate customer funds and safeguards against proprietary misuse.
- Robust Anti-Money-Laundering and Counter-Terrorist Financing (AML/CFT) compliance with real-time visibility.
- Cybersecurity and operational resilience, including cold storage, independent audit, and tested continuity plans.
- Market integrity and conduct rules against manipulative trading, deceptive advertising, and “rug pulls.”
- Transparency and data reporting, with regulators having read-only, real-time access to transaction data and publication of aggregated market information to support research and policy.
These pillars, Dr. Atingi-Ego said, are not theoretical. They mirror the backbone of jurisdictions that have successfully integrated virtual assets into regulated finance.
He emphasised that the regulatory question is not only “who regulates?” but how institutions coordinate. He recommended a model similar to Kenya’s functional split, Bank of Uganda overseeing payment-related virtual assets, the Capital Markets Authority supervising investment products, reinforced by a Financial Integrity Authority to strengthen oversight and joint supervision via memoranda of understanding and joint teams. “Regulation succeeds not when one institution does everything, but when every institution does what it does,” he said
Beyond legal design, the Governor emphasized capability building. Technology evolves faster than rules; regulators must invest in “world-class supervisory capacity” and an ecosystem of talent able to understand, test, and monitor innovations. Uganda already operates regulatory sandboxes, he reminded delegates, and he encouraged innovators and financial institutions to use them more deliberately to pilot use cases. “This is how we learn before we legislate, and how we design rules grounded in experience, not speculation.”
Dr. Atingi-Ego also framed a competitive question for policymakers and the private sector alike: how will Uganda differentiate itself in the East African market, where Kenya has already opened regulatory doors?
While acknowledging Kenya’s head-start — “Kenya has begun licensing its first virtual asset service providers,” he rejected the notion that Uganda must accept second-tier status. Instead, he called for intelligence, determination, and strategic focus: high-quality legislation, world-class supervisory capacity, investment in talent and infrastructure, and strategic differentiation so Kampala can compete with Nairobi on more than rhetoric.
He closed with a call to shared responsibility: industry must engage constructively and accept regulation as the foundation for sustainable growth; regulators must build capacity and coordinate; consumers must remain vigilant; and international partners should support training and technology transfer while respecting Uganda’s context. “Our goal is not to choose between innovation and stability. Our goal is to achieve both with urgency and discipline,” he said.
The result, he suggested, could be a digital financial future worthy of Uganda’s talent, creativity, and ambition.
The Kampala Blockchain Summit is an annual event hosted by the Blockchain Association of Uganda (BAU). This year’s event is held under the theme “From Regulation to Growth: Uganda as a Regional Hub for Virtual Assets” reflecting the country’s current regulatory momentum, including the recent Cabinet approval of the Virtual Assets and Virtual Assets Service Providers Money Laundering & Terrorism Financing Risk Assessment Report 2025, and the Financial Sector Stability Forum’s establishment of a dedicated working group on digital assets.
The summit represents a pivotal moment in Uganda’s journey toward becoming East Africa’s leading hub for responsible virtual asset adoption. The Governor’s participation marks a watershed moment for Uganda’s virtual assets economy, signaling Bank of Uganda’s commitment to shaping smart regulation that balances innovation with consumer protection.
See also: Private sector players in tech and finance stepped up to form the Blockchain Association of Uganda
