Custodial wallet / SaaS in Uganda

Virtual assets are not legal tender in Uganda: Bank of Uganda Governor Michael Atingi-Ego confirmed at the Blockchain Summit in Kampala on 25 November 2025 that the central bank 'stated publicly that virtual assets are not legal tender and that participation is at one's own risk'.

The Bank of Uganda neither licenses nor supervises virtual assets or virtual asset service providers: its circular of 29 April 2022 states that it 'has not licensed any institution to sell cryptocurrencies or to facilitate the trade in crypto-currencies', and ESAAMLG's 7th Follow-Up Report of September 2021 records that Uganda has no designated supervisory authority for VASPs. Ugandan VASPs are nonetheless accountable persons at paragraph 16 of Schedule 2 to the Anti-Money Laundering Act, 2013 and must register with the Financial Intelligence Authority.

The Bank of Uganda's circular of 29 April 2022, signed by Andrew Kawere, Director of National Payments System, and invoking sections 13(1)(b) and (f) of the National Payment Systems Act, 2020, directs entities licensed under that Act to desist from facilitating cryptocurrency transactions; it is addressed to payment system licensees rather than to banks generally, and it imposes no rule on holding virtual assets on behalf of clients.

Uganda operates no licence, authorisation or registration category for virtual-asset or digital-asset custody; ESAAMLG's 7th Follow-Up Report of September 2021 records that 'there is no registration or licensing requirements for VASPs before they start operating their business in Uganda', and the position was unchanged when the Governor of the Bank of Uganda called for a licensing framework on 25 November 2025.

This is because regulated financial institutions are currently prohibited from engaging in these activities. Any entity attempting to provide such services would operate in an unregulated space, with potential legal and operational risks.

Licences issued under Uganda's National Payment Systems Act, 2020 (Act 15 of 2020, Chapter 59) and the Financial Institutions Act, 2004 (Act 2 of 2004, Chapter 57) confer no authority over virtual-asset custody: neither statute mentions virtual assets, cryptocurrency or digital assets, and the Bank of Uganda's circular of 29 April 2022 directs National Payment Systems Act licensees away from cryptocurrency altogether.

Uganda imposes no segregation requirement on client virtual assets and recognises no virtual-asset custodian in any instrument; virtual asset service providers nevertheless operate lawfully and are accountable persons at paragraph 16 of Schedule 2 to the Anti-Money Laundering Act, 2013, so the absence of a segregation rule reflects the absence of any prudential regime rather than a prohibition on the activity.

Uganda imposes no insurance, bonding or indemnity requirement on virtual-asset custodians, because no Ugandan instrument creates a virtual-asset custodian category at all; the National Payment Systems Act, 2020 and the Bank of Uganda's National Payment Systems Regulatory Sandbox Framework, 2021 are both silent on virtual assets, and ESAAMLG records that Uganda has no VASP registration, licensing or supervisory regime.

No Ugandan instrument mandates cold storage, hot-wallet limits or any key-management standard for virtual assets; the only official Ugandan text that discusses cold storage is the Financial Intelligence Authority's Virtual Assets Working Document of February 2023, which describes offline, paper and hardware wallets in explanatory terms and imposes nothing.

Ugandan law defines no 'qualified custodian' for digital assets; the expression belongs to United States securities regulation and has no standing in Uganda, whose only virtual-asset legal category is the virtual asset service provider listed at paragraph 16 of Schedule 2 to the Anti-Money Laundering Act, 2013, a category that carries anti-money-laundering registration duties and no custody standard.

Uganda operates no licensing regime and no supervisory framework for virtual asset service providers and has designated no VASP supervisor, but VASPs are accountable persons under paragraph 16 of Schedule 2 to the Anti-Money Laundering Act, Cap. 118, inserted by SI 136 of 2020, and must register with the Financial Intelligence Authority.

The Bank of Uganda has not licensed any institution to sell cryptocurrencies or to facilitate trade in cryptocurrencies, and its Governor states that virtual assets are not legal tender in Uganda and that participation is at one's own risk.

Current Situation: No specific license. Many operate in a grey area.

Potential Interpretation: Unless the custody service is directly tied to a payment system or involves managing traditional financial assets alongside virtual assets, it is highly unlikely to fall under any existing financial services licensing regime. These entities currently operate without specific oversight.

Uganda's Anti-Money Laundering Act, 2013 (Act 12 of 2013), consolidated as Chapter 118, imposes its obligations on accountable persons, defined as any person listed in its Second Schedule, and section 18 establishes the Financial Intelligence Authority; the Act reaches virtual asset service providers by express designation rather than by interpretation, because the Anti-Money Laundering (Amendment of Second Schedule) Instrument, 2020 (Statutory Instrument 136 of 2020) added virtual asset service providers to that Schedule with effect from 27 November 2020, and they stand as paragraph 16 of Schedule 2 in the Financial Intelligence Authority's signed registration guidelines of January 2024, which require every accountable person to register with the Authority.

Uganda's Anti-Money Laundering Regulations, 2015 are Statutory Instrument 75 of 2015, made on 24 December 2015 under the Anti-Money Laundering Act, 2013, and they do carry the implementing detail the claim describes: Part V, regulations 13 to 27, sets out customer due diligence and verification for natural persons, foreign nationals, entities, partnerships and trustees; regulation 42 requires an accountable person to keep transaction and due-diligence records for a minimum of five years from completion of the relevant business or transaction; and regulation 39 governs suspicious transaction reporting to the Financial Intelligence Authority, with regulation 39(3) additionally requiring reports of cash transactions above one thousand currency points.

Uganda has no Financial Intelligence Authority Act, of 2013 or of any year; the Uganda Legal Information Institute's consolidated index of legislation carries no such title. The Financial Intelligence Authority is established by section 18 of the Anti-Money Laundering Act, 2013 (Act 12 of 2013), Chapter 118, which reads 'There is established a Financial Intelligence Authority', and the Authority's functions of receiving, analysing and disseminating financial intelligence flow from that Act rather than from a separate statute.

Evidence fact ug.aml.identification-and-verification not found (may have been renamed).

Individual Customers: Obtain and verify the customer's full name, permanent address, date of birth, national identification number (e.g., National ID, passport), and other relevant identification documents.

Legal Entities (Companies, etc.): Obtain and verify the company's registered name, legal form, proof of incorporation, physical address, business registration number, tax identification number, and details of directors, beneficial owners, and authorized signatories.

Beneficial Ownership: Identify and verify the identity of the beneficial owner(s) – the natural person(s) who ultimately own or control the customer, or the natural person(s) on whose behalf a transaction is being conducted.

Ongoing Monitoring: Continuously monitor the business relationship and transactions undertaken by the customer to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile, including the source of funds where necessary.

Enhanced Due Diligence (EDD): Apply EDD for higher-risk customers, transactions, or business relationships. This includes:

Report Suspicious Transactions: Report any transaction (attempted or completed) where there is a reasonable suspicion that the funds involved are proceeds of crime, or are linked to money laundering, terrorist financing, or proliferation financing.

Regulation 39 of Uganda's Anti-Money Laundering Regulations, 2015 (Statutory Instrument 75 of 2015) requires an accountable person to report a suspicious transaction to the Financial Intelligence Authority as soon as is practicable and in any case not later than forty-eight hours, on the prescribed form, while section 9(2) of the Anti-Money Laundering Act, 2013 sets the statutory limit as without delay and not later than two working days from the date the suspicion was formed, so the forty-eight-hour figure is the regulation's and the two-working-day figure is the Act's.

No Tipping-Off: Not disclose to the customer or any third party that a suspicious transaction report has been made or that a money laundering investigation is being conducted.

Uganda's Anti-Money Laundering Act 2013 s. 7(3) requires records to be kept for a minimum period of ten years from the date on which the evidence of identity of a person was obtained, the date of any transaction or correspondence, or the date on which the account is closed or the business relationship ceases, whichever is the later.

Entity Targeted: All Regulated Financial Institutions (e.g., Commercial Banks, Payment Service Providers, Microfinance Deposit-taking Institutions). Violation Type: N/A (this was a pre-emptive prohibition, not an action against a prior violation by a crypto firm). Penalty Amount: N/A (the circular itself did not impose a fine on a crypto entity, but implied penalties for regulated entities that failed to comply with the directive). Outcome: The BoU issued a circular directing all supervised financial institutions to cease facilitating transactions related to virtual currencies. This effectively cut off cryptocurrency exchanges and related businesses from accessing formal banking services in Uganda. The BoU cited concerns over consumer protection, money laundering, terrorism financing, and the lack of specific regulations. This directive has made it extremely challenging, if not impossible, for crypto businesses to operate formally within the Ugandan financial system.

Entity Targeted: The general public and unregulated virtual asset service providers (implicitly). Violation Type: N/A (warnings about risks, not specific violations). Penalty Amount: N/A. Outcome: These warnings emphasize that cryptocurrencies are not legal tender, are not regulated by the BoU, and carry high risks of fraud, money laundering, and loss of funds. The FIA has also highlighted AML/CFT risks. The lack of a specific licensing and regulatory framework for VASPs means that any entity operating with virtual assets does so without official recognition or oversight, increasing their operational risk and exposure to potential future actions should a framework be introduced. This environment largely prevents formal enforcement actions against VASPs for regulatory non-compliance because there aren't specific VASP regulations to violate yet, other than general financial laws (e.g., fraud).