Uganda -- Custody Regulations Regulatory Overview

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.

National Payment Systems Act, 2020: https://ulii.org/ug/legislation/act/2020/8 (This Act governs traditional payment service providers and e-money issuers, but not digital asset custodians.)

Financial Institutions Act, 2004: https://ulii.org/ug/legislation/act/2004/2 (This governs traditional banking institutions.)

Segregation of Client Assets Rules:

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 National Payment Systems Act, 2020 requires payment service providers and electronic money issuers to hold customer funds in trust accounts, at sections 49 to 52 covering trust accounts, duties of trustees, special accounts and protection of trust and special accounts, and the Financial Institutions Act, 2004 governs banks; neither regime extends to virtual assets, so no Ugandan segregation duty attaches to client crypto holdings.

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.

Capital adequacy and prudential requirements under Uganda's Financial Institutions Act, 2004 and the National Payment Systems Act, 2020 bind only licensed banks and payment institutions and address no virtual-asset exposure, while virtual asset service providers in Uganda owe no capital, liquidity or prudential requirement of any kind, since Uganda has designated no prudential supervisor for them.

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 has no bill before Parliament dedicated to virtual-asset custody, but the direction of travel is now on the record: Bank of Uganda Governor Michael Atingi-Ego proposed a licensing framework on 25 November 2025 under which 'Providers must segregate client assets, maintain adequate capital, and prevent the use of customer funds for proprietary trading', split between the Bank of Uganda for payments and the Capital Markets Authority for investments, and that proposal has not been enacted or published as a bill.

However, like many countries, Uganda is likely exploring broader fintech and digital asset policy. Discussions around a "National Digital Transformation Agenda" or reviews of financial sector laws might eventually lead to the consideration of digital assets.

Any future regulation of digital assets, including custody, would likely require amendments to existing laws like the National Payment Systems Act, 2020, or the creation of entirely new frameworks. The BoU has expressed a desire to understand emerging technologies better, and there might be sandbox initiatives in the future, but these do not constitute comprehensive custody regulations.

Uganda's Anti-Money Laundering Act, 2013 (Act 12 of 2013) already binds virtual asset service providers: Statutory Instrument 136 of 2020, effective 27 November 2020, added VASPs to Schedule 2, where they stand at paragraph 16, and section 21(pb) of the Act requires every accountable person so listed to register with the Financial Intelligence Authority. That duty is in force now and is not conditional on any future licensing, while the Act imposes no custody, segregation or safekeeping standard for digital assets.