Stablecoin issuer / redeemer in Uganda

The Bank of Uganda's operative crypto instrument is a circular of 29 April 2022 issued under sections 13(1)(b) and (f) of the National Payment Systems Act 2020, which direct the central bank's power to act against a licensee that fails to adhere to its directives or endangers financial stability; the circular binds Bank of Uganda licensees and supervised financial institutions, names no stablecoin, and creates no statutory prohibition on issuing, holding or trading stablecoins in Uganda.

Uganda has no stablecoin instrument of any kind: the National Payment Systems Act 2020 (Act 15 of 2020, Cap. 59) carries no occurrence of stablecoin, virtual asset, virtual currency or cryptocurrency, and its definition of electronic money reaches only monetary value issued by a licensed issuer upon receipt of an equivalent amount of funds, so no Ugandan law classifies a stablecoin as electronic money, a payment token or a security.

Uganda operates no licensing regime for stablecoin issuers: section 6 of the National Payment Systems Act 2020 bars a person from offering a payment service, operating a payment system or issuing a payment instrument without a Bank of Uganda licence, and no Ugandan statute or statutory instrument creates a virtual-asset, VASP or stablecoin licence.

Ugandan law confers no redemption right on a stablecoin holder; the only statutory redemption anchor is the definition of electronic money in the National Payment Systems Act 2020, which requires the instrument to be prepaid or redeemable in cash and binds only licensed electronic money issuers, so a stablecoin holder's position rests entirely on the issuer's contract.

Uganda imposes no reserve, backing or reserve-asset duty on stablecoin issuers; the only comparable Ugandan obligation is the funding rule for licensed electronic money issuers in the National Payment Systems Act 2020, whose section 47 requires electronic money to be issued only after an equivalent amount of cash is deposited in a trust account or special account, and that duty reaches no stablecoin issuer.

Sections 47, 49 and 51 of the National Payment Systems Act 2020 require a licensed electronic money issuer to issue electronic money only after an equivalent amount of cash is deposited, to apply to the Bank of Uganda for a trust account, and, where the issuer is a financial institution or microfinance deposit-taking institution, to open and maintain a special account with the central bank's approval; these duties attach only to holders of a Bank of Uganda electronic money licence and reach no stablecoin issuer.

Bank of Uganda Circular No. 008 of 2022 – Warning Against Dealing in Cryptocurrencies:

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.

Uganda's payment-services statute is the National Payment Systems Act, 2020 (Act 15 of 2020, Cap. 59), assented on 29 July 2020 and commenced on 4 September 2020, supplemented by the National Payment Systems Regulations, 2021 gazetted on 5 March 2021; the Act carries no reference to virtual assets, cryptocurrency or digital currency.

National Payment Systems Regulations, 2021: (Often published as a statutory instrument, typically available via the Uganda Legal Information Institute or Ministry of Finance archives).

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.

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 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'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.

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.

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.

A Ugandan company's gain on disposing of crypto held as a business asset is included in business income and taxed at the 30% corporate rate, because the Income Tax Act, Chapter 338, imposes no separate capital gains tax and gains on disposal of non-depreciable business assets fall into business income; no crypto-specific provision produces that result.

Uganda's corporate income tax rate is 30% of a company's chargeable income under the Income Tax Act, Chapter 338, and it reaches crypto-related business profits only through that general charge, Uganda having enacted no virtual-asset tax.

Services Related to Crypto: If a business provides services related to cryptocurrency (e.g., exchange services, wallet services, advisory services), the fees charged for these services would likely be subject to VAT. For example, the commission charged by a crypto exchange for facilitating a trade would probably be VATable.