The Central Bank of Uganda recently maintained a prohibition on cryptocurrency transactions within the country. In response to this, Silver Kayondo filed an application to the High Court seeking to quash the directive and to render cryptocurrencies as legal digital property. In his ruling, Justice Ssekaana of the High Court denied his plea and noted that the bank's directive is not an infringement of individual property rights. He further stated that it is intended to keep an undefined system from becoming a payment instrument in Uganda.

Justice Ssekaana went on to explain that the statement released by the Bank of Uganda did not promise any sort of future benefit or legal allowance for cryptocurrency use in the country. Rather, the document clarifies Uganda’s position on the matter. He ultimately ordered that each party bear the costs of bringing the matter before court.

The decision by the High Court further highlights the difficulty of introducing blockchain technology and cryptocurrency solutions in the jurisdictions of African nations, where the regulatory environment over digital assets is still debated heavily. Whereas countries like Rwanda and Kenya have begun the process of developing a framework to levy taxes on crypto-related activities, many others in the continent are yet to make a clear decision on the issue.

This recent ruling by the Ugandan High Court is seen by some as a missed opportunity for the country to take on an early mover advantage in the crypto space. Given that many crypto projects are taking off on the continent, Africa could have seen significant benefit with Uganda acting as a trailblazer in that respect. However, in the case of Uganda, the central bank has maintained its stance of non-intervention when it comes to cryptocurrencies and other digital assets.



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