Uganda is preparing a new law to regulate cryptocurrency businesses and other virtual asset service providers, with the proposed Virtual Asset Service Providers Bill expected to be presented to Cabinet.
Dennis Kizito, Director of Market Supervision at the Capital Markets Authority (CMA), said the proposed legislation was progressing towards Cabinet as regulators worked on regulations that will guide its implementation.
Kizito said the supporting regulations were being prepared early to avoid delays once Parliament passes the law.
The proposed legislation is expected to establish requirements for businesses providing virtual asset services, including cryptocurrency exchanges, digital asset transfers and the custody of digital assets.
The move comes amid growing regulatory concerns over risks associated with the sector, including money laundering, terrorism financing, fraud and the protection of consumers who use virtual asset platforms.
Uganda has already taken preliminary steps to bring the industry under regulatory oversight through amendments to its anti-money laundering framework. The changes require virtual asset service providers to register with the Financial Intelligence Authority (FIA) and comply with relevant reporting obligations.
The FIA has also assessed risks associated with virtual assets and identified the need for stronger supervision and a comprehensive legal framework.
The proposed law is expected to define the obligations of businesses operating in the sector and clarify the responsibilities of government institutions involved in regulating their activities.
If approved by Cabinet and passed by Parliament, the legislation would provide a dedicated legal framework for supervising Uganda’s virtual asset industry, which covers businesses dealing in cryptocurrencies and other digital assets.
