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Uganda’s financial Intelligence classifies crypto service providers as accountable persons in the new AML amendment



Uganda’s Financial Intelligence Authority (FIA), on 10 December, 2020, released a press statement via their Twitter handle, stating that it has amended the country’s 2013 Anti-Money Laundering Act through an Act of Parliament to classify Virtual Asset Service Providers (VASPs) as Accountable Persons.

As contained in the document released, “Accountable Persons” are persons or businesses that might be used as channels to launder money or promote terrorism which are listed in the second schedule to the the Anti-Money Laundering Act (AMLA), 2013.

In 2020, Uganda’s government through its parliament, strongly advised the general public to stay away from cryptocurrencies. This statement was fuelled by the concurrent ponzi schemes associated with cryptocurrency in the country. David also said that the masses should only do their business transactions with only licensed financial institutions.

This led to parliament members to raise their views and opinions concerning cryptocurrency and most of the members calling for its total ban of cryptocurrencies and related digital assets. One of the parliament members, Hon. Jovah Kamateeka clearly states that the youths should value hard work and to avoid being scammed by a computer.

Also, the State Minister of Uganda, Hon David Bahati also hinted on a possible regulation of cryptocurrency and digital assets coming soon. David said:

“The Second Schedule of the Anti-Money Laundering Act, 2013 is also being amended to include virtual assets providers on the list of accountable persons. This will bring virtual assets service providers including providers of cryptocurrencies to be brought under the purview of the Financial Intelligence Authority and will be required to adhere to reporting requirements under the Act.”

CryptoSavannah, a top company in East Africa, whose name was among the companies wrongly mentioned as running a fraudulent ponzi scheme. The CEO, Kwame Ruganda speaks on the misinformation and misunderstanding of cryptocurrencies and his related digital assets as ponzi schemes and scams. He said that the parliament members have represented this misinformation about the whole idea of Cryptocurrency. He further mentioned, CryptoSavannah is a technology business that develops blockchain solutions and not pyramid ponzi schemes. Also, CryptoSavannah is part of the Blockchain Association of Uganda.

Prior to the parliament sitting, the Blockchain Associations of East Africa consisting of Kenya, Uganda, Rwanda and Tanzania jointly released a press statement regarding the recent crypto scams and ponzi schemes affecting the East African region in December, 2019.

They clearly explained:
What is a cryptocurrency?
What is a CryptoSavannah used for?
Are they legal and how are they regulated?
What are Ponzi Schemes, and how can they be recognized?
How can the public differentiate a cryptocurrency from a ponzi scheme?

The New Amended Act by the FIA explains that Cryptocurrency Exchanges(s) and Virtual Asset Service Providers (VASPs) are now under the jurisdiction of the Financial Intelligence of Authority (FIA).

The Amendment states that any individual or institutions that conduct one or more of the following activities listed below on behalf of another person or institution, is required to be registered with the Financial Intelligence of Authority (FIA) before 27th December, 2020.

The exchange between virtual asset and fiat currencies,
The transfer of virtual assets,
The safekeeping or administration of virtual assets or instruments enabling control over virtual assets,
The participation in or provision of financial services related to an insurer’s offer or sale of a virtual asset.

Also, under amended Anti-Money Laundering (AML), 2013. Cryptocurrency Enthusiasts and Players are fully expected to keep detailed records, undergo Know Your Customer (KYC) and report suspicions and huge cash transfer or transactions. If it is an institution, they must offer Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) training programs to their employees and putting in place internal controls, procedures and policies with measures for detecting and preventing money laundering and terrorist financing.

The new amendment comes barely one year after LUNO, an African Exchange started full operations in the Country and two months after Binance announced his closure in Uganda.

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Nigeria’s Central Bank Digital Currency e-Naira Gain Traction




According to Governor Godwin Emefiele, the Central Bank of Nigeria’s (CBN) digital currency, the eNaira, which was officially revealed on Monday, has garnered immense interest and a positive response from both within and beyond Nigeria, with 33 banks fully integrated on the platform. The CBN has successfully minted $500 million, with N200 million going to financial institutions, according to Emefiele, who spoke at President Buhari’s historic launch in Abuja.

In addition, over 2,000 clients have been added to the eNaira platform, and over 120 merchants have successfully enrolled. Since its launch, the eNaira website has had approximately 2.5 million daily views. Customers who download the eNaira Speed Wallet App will be able to complete the onboarding process and build their wallet, locate their eNaira wallet from their bank account, transfer eNaira from one wallet to another, and make payments at registered merchant locations.

In terms of maintaining a robust payment system, the Central Bank of Nigeria (CBN) feels that the eNaira will make a big difference to Nigeria and Nigerians. The eNaira will also lower the cost of processing currency, allowing for more direct and transparent welfare interventions for citizens, as well as increased revenue and tax collection, easier diaspora remittances, lower the cost of financial transactions, and improved payment efficiency.

Governor Godwin Emefiele outlined these advantages during the historic debut in Abuja, saying that Nigeria’s Central Bank Digital Currency (CBDC) is the first in Africa and a digital version of the actual Naira. 

What is eNaira?

The eNaira is the same Naira with considerably more possibilities, Emefiele asserted emphatically, guaranteeing that the new payment system is one of the most robust in the world, sufficiently safeguarded, and thus nothing to worry about.

In 2017, the Central Bank of Nigeria (CBN) began an intensive study, consultations, identification of use cases, and testing of the CBDC idea in a Sandbox environment, in response to increased interest in Central Bank Digital Currency (CBDC) around the world.

The goal of the study was to provide a strong argument for the introduction of a digital currency in Nigeria so that all Nigerians can benefit from a more successful and inclusive economy.

Following the completion of preliminary research, the CBN’s researchers and experts were able to clearly establish that a digital currency will promote a more paperless, inclusive, and digital economy, complementing the successes of prior policy initiatives and our rapidly increasing payment systems.

As a result, the CBN decided to create its own CBDC, dubbed the eNaira. Like the physical Naira – eNaira is a legal tender in Nigeria and a liability of the CBN, which will have the same value and always be exchanged at 1 naira to 1 eNaira

To reduce the risk of the process, the CBN has carefully considered the entire payments and financial architecture, and has structured the eNaira to complement and improve these ecosystems, as well as implementing security protections and policies to ensure the financial system’s integrity.

To maintain the integrity and stability of Nigeria’s payment system, strict adherence to anti-money laundering and counter-terrorist financing regulations would be enforced, according to Emefiele.

The eNaira, like other digital revolutions, is a journey, and Nigerians should expect more features in the coming months. Accessibility and onboarding of consumers without BVN, as well as the usage of the eNaria on the phone without access to the internet, are among them. 

Nigeria will be one of the first countries in the world to implement the CBDC using USSD on phones, bypassing the need for internet access. The CBN also plans to use the eNaira platform to onboard revenue collection agencies in order to increase and simplify collections, as well as to create sector-specific tokens to support the Federal Government’s social programs and distribution of targeted welfare schemes in order to lift millions of people out of poverty by 2025.

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Jack Dorsey‘s Square to develop open source Bitcoin mining



Jack Dorsey Bitcoin

On Friday, October 15, Twitter CEO Jack Dorsey announced that American fintech company, Square, would be looking to get into Bitcoin mining. Jack Dorsey who is also Square’s CEO announced this on Twitter which subsequently sent waves through the bitcoin market, surging its price to almost a record high, rising over $62,000 over the weekend. According to the Twitter boss, Square is looking to building an open source Bitcoin mining system that would be available to individuals and businesses.

Sharing his thoughts further on the initiative, he stated that “Mining needs to be more distributed” and that “the more decentralized [mining] is, the more resilient the Bitcoin network becomes. He also mentioned the apparent inaccessibility of mining stating that “Bitcoin mining should be as easy as plugging a rig into a power source.

Dorsey also believes that bitcoin mining “needs to be more efficient and that “clean and efficient energy use” would be undoubtedly beneficial to the digital currency in the long run.

Dorsey ended the thread by saying that a “technical investigation would be undertaken by a Square team led by Jesse Dorogusker, Square’s hardware lead. If successful, this initiative would be another of Square’s bitcoin focused projects which includes a Bitcoin hardware wallet.


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Financial Leaders from G7 Release Guidelines for Central Bank Digital Currency



Source: World Atlas

At a meeting that was held in Washington, yesterday, October 13, G7 leaders discussed central bank digital currency and endorsed 13 public policy principles with regards to their implementation. The financial leaders from G7 agreed that CBDCs would complement cash and should not be detrimental to the monetary system. The G7 leaders have been discussing CBDCs this week concluding that they should do no harm and meet rigorous standards.

It should be noted that G7 includes finance leaders in advanced economic nations comprising of Canada, France, Germany, Italy, Japan, the U.S and the U.K. the G7 leaders make it mandatory that any newly launched CBDC should not harm the central bank’s ability to perform its duty of maintaining financial stability. In a joint statement by the G7 finance ministers and central bankers, they said that, 

“Strong international coordination and cooperation on these issues help to ensure that public and private sector innovation will deliver domestic and cross-border benefits while being safe for users and the wider financial system.” 

The joint statement further states that CBDCs are complements to cash and could serve as a liquid or safe settlement assets with an added advantage of anchoring existing payment systems. CBDCs issuance should be entrenched in a long-standing public commitment to transparency, rule of law, and sound economic governance. The statement added at CBDCs must be so efficient that they are fully interoperable on a cross-border basis. 

The G7 leaders agreed that they had a duty to minimize the incidence of ‘harmful spillovers to the international monetary and financial system” 

The G7 statement reiterated a similar statement earlier made by G20 that no global stablecoin project should begin operation until such a token has addressed legal, regulatory and oversight requirements. 

Countries like China and Nigeria are ahead of the pack with regards to the adoption of digital Yuan and Naira respectively. China’s crackdown on cryptocurrency may be a step forward for the country’s plan to promote its digital Yuan. Nigeria, on the other hand, postponed the launch of its eNaira in deference to the 61st anniversary of Nigerian independence on Oct 1. 

However, countries like the US and the UK are dragging their foot with regards to the introduction of CBDCs to their financial system. There are insinuations that America is in danger of being left behind technologically and financially if it doesn’t get serious with the implementation of CBDC in its financial system.

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