Central Bank of Uganda Is Not Too Impressed With Cryptocurrencies

Uganda is gearing up for the 2019 Africa Blockchain Conference, which would make one think that the country has wholeheartedly accepted cryptocurrency trading, for which blockchain is a foundation.

However, the statements pouring out from the central bank of Uganda, says a different story. The deputy governor of the Bank of Uganda, was speaking in a Town Hall meeting in the city of Masaka, where he warned the general public about the risks associated with crypto trading.

Dr. Louis Kaskender raised concerns about the unregulated nature of cryptocurrencies, and how it is extremely risky to invest all your money on crypto. He said:

“[…] online cryptocurrency businesses are not regulated at the moment and therefore carry a significant risk of loss of savings, with no recourse to protection or insurance by government, like is the case with regulated financial institutions such as commercial banks,” as quoted by Cointelegraph.

Due to cryptocurrency being a decentralized system and there being no central authority to oversee the transactions, Kaskender feels that it is a really big gamble to trade in cryptos. He said that the central bank doesn’t have a “comprehensive oversight of all financial services firms and institutions”.

Only things like commercial banks, foreign exchange bureaus and money remittance service providers come under the purview of central bank. This is a bold statement on his part stating that the central bank does not promote trading in cryptocurrencies because such transactions are beyond the purview of the bank.

We have traditionally witnessed central banks being skeptical about accepting or acknowledging cryptocurrencies because they stand for all the values that are completely opposite to those embodied by central financial institutions. This is once again, a classic case of that.