Uganda -- Licensing Requirements Regulatory Overview

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 operative Bank of Uganda measure is the circular of 29 April 2022, signed by Andrew Kawere, Director of National Payments System, which states that the Bank has not licensed any institution to sell or facilitate trade in cryptocurrencies and directs all entities licensed under the National Payment Systems Act, 2020 to desist from facilitating cryptocurrency transactions under sections 13(1)(b) and (f) of that Act; the circular dates from 2022, not 2021.

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.

Reference: Bank of Uganda, Public Notice on Cryptocurrencies (various notices, e.g., November 2021, March 2019, generally found in their press release archives). While specific direct URLs for older press releases can be hard to pinpoint consistently, searching "Bank of Uganda cryptocurrencies" on their official website (www.bou.or.ug) will yield relevant advisories.

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.

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).

Relevance: The NPS Act and its regulations govern the operation of payment systems and the licensing of payment service providers (PSPs). While it does not explicitly mention cryptocurrencies, an argument could be made that any entity facilitating fiat-to-crypto or crypto-to-fiat transactions, or otherwise dealing with funds in a way that resembles traditional payment services, might fall under the purview of these laws. However, the BOU has not clarified how these laws apply to crypto-specific businesses.

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

Potential Interpretation: If an exchange facilitates transactions between fiat currency and virtual assets (or vice versa), it could theoretically be deemed to be performing functions similar to a money remitter or payment service provider. In such a scenario, they might be required to obtain a Payment Service Provider (PSP) license or a Payment System Operator (PSO) license under the National Payment Systems Act, 2020, regulated by the Bank of Uganda.

Requirement for a PSP/PSO License (General): This would entail meeting the requirements for traditional payment service providers.

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.

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

If the processing involves converting fiat to crypto, or crypto to fiat for merchants/users, it again might be seen as a Payment Service Provider (PSP) under the NPS Act.

If the processor only handles crypto-to-crypto payments for merchants (e.g., accepting Bitcoin and paying the merchant in Ethereum), it would likely fall outside current licensing requirements.

Requirement for a PSP License (General): As above.

Uganda operates no licensing regime for virtual asset service providers, but a registration regime does exist: SI 136 of 2020 of 27 November 2020 amended the Second Schedule to the Anti-Money Laundering Act, 2013 to make VASPs accountable persons, and they appear at paragraph 16 of that Schedule with a duty to register with the Financial Intelligence Authority.

Current: No specific capital requirements for crypto businesses.

Hypothetical (based on PSPs): For a Payment Service Provider license under the NPS Act, there are minimum paid-up capital requirements (e.g., UGX 100 million for Tier 1 PSPs, UGX 10 billion for Tier 2 PSPs like e-money issuers – these figures are indicative and subject to change by the BOU). A future crypto license would likely have similar or tailored capital requirements depending on the scope of services.

Uganda does have crypto-specific anti-money-laundering law: the Anti-Money Laundering Act, 2013 (Act 12 of 2013, Cap. 118) was amended by SI 136 of 2020 to add virtual asset service providers to its Second Schedule as accountable persons, and they must register with the Financial Intelligence Authority and discharge the full accountable-person duties.

Reference: Anti-Money Laundering Act, 2013 (and subsequent amendments, available via Uganda Legal Information Institute: https://www.ulii.org/ug/legislation/act/2013/6)

Relevance: Financial Institutions and designated non-financial businesses and professions (DNFBPs) are subject to AML obligations. Although VASPs are not explicitly listed as "financial institutions" under the current AML Act, any entity dealing with funds or facilitating financial transactions is expected to implement AML/KYC measures in practice to avoid involvement in illicit activities. Any future VASP regulation would certainly impose strict AML/KYC obligations, including:

Customer Due Diligence (CDD) procedures.

Reporting of suspicious transactions (STRs) to the Financial Intelligence Authority (FIA).

Current: No specific requirement for crypto businesses.

Hypothetical (based on traditional financial services): For regulated financial services, a local physical presence, local incorporation, and often local management and directors are typically required. This would almost certainly be a requirement for any future VASP license, ensuring local oversight and accountability.

Initial Consultation: Informal discussions with the Bank of Uganda.

Application Submission: Submitting a formal application to the BOU, including:

Company incorporation documents (must be a Ugandan entity).

Detailed business plan, including services offered, target market, operational procedures.

Technical and security specifications of the platform/technology.

Proof of capital (e.g., audited financial statements, bank statements).

AML/CFT Policy and Compliance Manual.

Information on key personnel (directors, senior management) – including background checks and fit-and-proper assessments.

Review and Due Diligence: The BOU would conduct a thorough review of the application, including site visits, interviews, and technical assessments.

Provisional Approval: If satisfactory, the BOU might grant provisional approval.

Final Approval and Licensing: Upon meeting all conditions, the BOU would issue the final license.

Ongoing Compliance: Licensees would be subject to ongoing supervision, reporting requirements, and compliance audits by the BOU.

Closely monitor regulatory developments: The landscape is dynamic, and new laws could emerge.

Seek legal counsel: Obtain specific legal advice on how existing laws might apply to their particular business model.

Implement strong internal controls: Proactively adopt international best practices for AML/KYC, cybersecurity, and consumer protection, as these will undoubtedly form the foundation of any future regulatory framework.

The Uganda shilling is the sole legal tender under section 23 of the Bank of Uganda Act (Statute 5 of 1993, Chapter 51), and no Ugandan instrument confers legal-tender status on any cryptocurrency; the Bank of Uganda's operative measure is its circular of 29 April 2022 to National Payment Systems Act licensees, which states that the Bank has not licensed any institution to sell cryptocurrencies or to facilitate the trade in cryptocurrencies.

Uganda has no virtual asset service provider licensing regime: the National Payment Systems Act 2020 (Act 15 of 2020) licenses only payment systems, payment service providers and electronic money issuers and never mentions virtual assets, cryptocurrency or digital currency, and the National Payment Systems Regulatory Sandbox Framework 2021 made under section 16 of that Act is equally silent; Ugandan virtual asset service providers 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, directs all entities licensed under the National Payment Systems Act 2020 to desist from facilitating cryptocurrency transactions and invokes sections 13(1)(b) and 13(1)(f) of that Act; the Financial Institutions Act 2004 (Act 2 of 2004, Chapter 57) carries no virtual-asset provision and confers no such prohibition on banks as such.

Bank of Uganda communications on virtual assets comprise a February 2017 statement on One Coin Digital Money operations, a 2019 warning delivered as a speech by Deputy Governor Louis Kasekende at Masaka, and the operative circular of 29 April 2022 addressed to National Payment Systems Act licensees rather than to the public; a speech creates no obligation, and the 2022 circular binds licensees only.

The Bank of Uganda issues currency under the Bank of Uganda Act (Statute 5 of 1993, Chapter 51) and licenses and supervises financial institutions under the Financial Institutions Act 2004 (Act 2 of 2004, Chapter 57) and payment providers under the National Payment Systems Act 2020, but it does not supervise all financial activity: the Capital Markets Authority licenses securities business under the Capital Markets Authority Act, Chapter 84, and no Ugandan authority is designated to supervise virtual asset service providers.

Ugandan virtual asset service providers are accountable persons at paragraph 16 of Schedule 2 to the Anti-Money Laundering Act 2013 (Act 12 of 2013, Chapter 118), inserted by the Anti-Money Laundering (Amendment of Second Schedule) Instrument 2020 (Statutory Instrument 136 of 2020) with effect from 27 November 2020, and must register with the Financial Intelligence Authority under section 21 of that Act; the duty is express and unconditional rather than contingent on whether a firm holds any licence.

The Capital Markets Authority of Uganda has taken no published position on virtual assets: its regulatory-notices index carries no notice on cryptocurrency, virtual assets or digital assets, and the four applications under review in the sandbox it launched in October 2025 comprise a retail fixed-income platform, an institutional fixed-income platform using blockchain settlement, a crowdfunding platform and one unspecified applicant, with no crypto or virtual-asset firm among them.

Uganda has no Bank of Uganda Act of 2000; the central bank statute is the Bank of Uganda Act, Statute 5 of 1993, commenced 14 May 1993 and consolidated as Chapter 51, and the Bank of Uganda's operative virtual-asset measure rests on sections 13(1)(b) and 13(1)(f) of the National Payment Systems Act 2020, not on the central bank statute.

Reference (via Uganda Legal Information Institute - ULII): https://www.uli.ug/uganda/legislation/act/2000/5/bank-uganda-act-2000

The Financial Institutions Act 2004 (Act 2 of 2004, Chapter 57), commenced 26 March 2004, empowers the Bank of Uganda to license and supervise financial institutions but carries no virtual-asset provision; the Bank of Uganda's circular of 29 April 2022 barring cryptocurrency facilitation was addressed to licensees under the National Payment Systems Act 2020 and invokes sections 13(1)(b) and 13(1)(f) of that Act.

Virtual assets are explicitly named in Uganda's anti-money-laundering law: paragraph 16 of Schedule 2 to the Anti-Money Laundering Act 2013 (Act 12 of 2013, Chapter 118) lists Virtual Asset Service Providers as accountable persons, inserted by the Anti-Money Laundering (Amendment of Second Schedule) Instrument 2020 (Statutory Instrument 136 of 2020) with effect from 27 November 2020, so their obligations rest on express designation rather than on inference from the Financial Intelligence Authority's general mandate.

No Ugandan statute prohibits an individual from holding or trading virtual assets: the National Payment Systems Act 2020, the Financial Institutions Act 2004 and the Bank of Uganda Act contain no such prohibition, and the Bank of Uganda's only operative measure is its circular of 29 April 2022 directing National Payment Systems Act licensees, not individuals, to desist from facilitating cryptocurrency transactions.

Uganda licenses no cryptocurrency exchange or other virtual asset service provider: the Bank of Uganda's circular of 29 April 2022 states that the Bank has not licensed any institution to sell cryptocurrencies or to facilitate the trade in cryptocurrencies, ESAAMLG records that no registration or licensing requirement applies to VASPs before they begin operating, and Governor Michael Atingi-Ego told the Kampala Blockchain Summit on 25 November 2025 that Kenya had begun licensing its first virtual asset service providers while Uganda had none.

The Bank of Uganda's circular of 29 April 2022 directs entities licensed under the National Payment Systems Act 2020 - payment system operators, payment service providers and electronic money issuers - to desist from facilitating cryptocurrency transactions, invoking sections 13(1)(b) and 13(1)(f) of that Act; no Ugandan instrument imposes an equivalent express prohibition on banks licensed under the Financial Institutions Act 2004.

Ugandan virtual asset service providers owe anti-money-laundering duties by express designation rather than by residual scrutiny: paragraph 16 of Schedule 2 to the Anti-Money Laundering Act 2013 lists them as accountable persons, and section 21 of that Act empowers the Financial Intelligence Authority to register accountable persons and to keep a register of them, with registration made mandatory by the Authority's signed January 2024 registration guidelines.

Risk for Users: Users engaging with unlicensed exchanges face significant risks, including the lack of security, potential for fraud, and no legal protection for their funds.