Africa is facing a drought in cryptocurrency knowledge as Uganda continues to fight against the tide of digital currencies.
Central Bank of Uganda warns against cryptocurrencies
The deputy governor of the Central Bank of Uganda, Dr. Louis Kasekende, warned Ugandan citizens against trading in cryptocurrencies. Kasekende claimed that the use of cryptocurrencies is risky because there are no regulations or financial institutions to govern them.
As reported on June 28 during a Town Hall meeting in Masaka, Kasekende said, “Let me state clearly that the cryptocurrency businesses are not regulated at the moment and therefore carry a significant risk of loss of savings, with no recourse to protection or insurance by government, like is the case with regulated financial institutions such as commercial banks.”
Trading in cryptocurrency is a high-risk investment considering that cryptocurrencies operate on decentralized systems, he said. He insisted that the Central Bank only governs commercial banks, foreign exchange bureaus, and money remittance service providers.
These comments raised mixed emotions considering that Uganda agreed to hold the 2019 Africa Blockchain Conference. In April this year, the Director of Uganda Communications Commission, Godfrey Mutabazi, highlighted that the country was eager to adopt blockchain technology. Despite this criticism, Uganda is embracing blockchain and implementing it in different sectors across the country.
Lack of crypto knowledge a big challenge for Africa
Lack of education in Africa is playing a major role in curbing crypto progress in Africa. Consumers are still wary of adopting cryptocurrency trading because they simply don’t understand it.
Despite its growth in the African market, crypto is still facing challenges and risks. These risks include a lack of local regulation, volatility in the value of a currency, issues arising from taxation, as well as cyber fraud.
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