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In the email to Mr. Kwame Rugunda, Chairman, Blockchain Association of Uganda, the Director at the BoU’s National Payments Service, Mr. Andrew Kawere, said:
“The Bank of Uganda (BoU) welcomes your proposal to share knowledge with our technical teams on the crypto business models and whether some use cases are suitable for testing under the regulatory sandbox.”
– Bank of Uganda (BoU)
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SEE ALSO: Bank of Uganda Launches a Regulatory Sandbox Framework to Test Innovative Financial Solutions
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A Regulatory Sandbox usually refers to live testing of new products or services in a controlled environment. Regulatory sandboxes are particularly common as the financial sector in Africa continues to witness changes in its landscape.
In 2021, The Bank of Uganda (BoU) announced the launching of a regulatory sandbox framework that sets the rules and requirements that allow innovative financial solutions to be tested in a live controlled environment.
According to the BoU, the roles of the sandbox include:
- Promote financial services innovation
- Attract capital and funding for fintech firms
- Provide shared learning opportunities for innovators and regulators
However, at the time, cryptocurrencies were not explicitly mentioned.
In May 2022, the bank issued a circular to all payments service providers, especially mobile money operators, reminding them to desist from facilitating cryptocurrency transactions.
In Africa, several Central Banks have publicly announced regulatory sandboxes, including:
- South Africa
- Kenya
- Ghana
- Zimbabwe
Zimbabwe announced the launch of a regulatory sandbox in 2021, but said that cryptocurrencies, digital currencies, and central bank digital currencies (CBDCs) are not eligible for the sandbox.
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