East African countries are taking the bull by the horns when it comes to digital finance. While Kenya has just taken a decisive step towards cryptocurrency regulation, Uganda is about to implement an initiative with its Central Bank Digital Currency (CBDC).
Uganda launches its digital Shilling pilot
The Bank of Uganda (BoU), the country’s central bank, is actively testing its own CBDC, a digital version of the Ugandan shilling.
The pilot project is based on a permissioned blockchain, meaning that access and transactions are managed and strictly controlled by the central bank.
The crucial point: this CBDC is backed by Ugandan treasury bonds. This mechanism would ensure that the digital currency maintains a stable value, anchored to government financial assets.
This launch is part of a broader trend: the Ugandan government is also exploring the possibility of tokenising state assets, which could include commodities or property titles, to simplify and secure their management.
Kenya imposes a strict regulatory framework on cryptocurrency
Meanwhile, neighbouring Kenya is making great strides in legislative developments. The Digital Assets Bill has just passed its final stage in Parliament.
Key takeaways:
- Mandatory licensing: The law now requires all cryptocurrency-related businesses (exchanges, wallet providers, etc.) to obtain licenses to operate legally in Kenya.
- Strict control: These businesses will be under the direct supervision of the Capital Markets Authority (CMA), Kenya’s financial markets regulator.
- Objective: The stated objective is twofold: to protect consumers from fraud and money laundering, while fostering a structured innovation ecosystem.
These two dynamics – technical advancement in Uganda and legal frameworks in Kenya – demonstrate a clear desire on the part of East Africa to be part of the global digital transformation. However, it remains to be seen how these initiatives will be sustained over time: will they serve primarily as tools of government control, or will they mark a genuine shift towards technological sovereignty capable of improving the daily economic lives of African citizens?
