Uganda's Central Bank Weighing Option Of Issuing Digital Currency
Uganda's central bank is weighing option of issuing digital currency
Uganda's central bank is considering whether to issue a digital currency and has not banned cryptocurrencies, but has concerns about risks from the technology including consumer protection and financial inclusion, a senior bank official said on Friday.
"Bank of Uganda is currently doing preliminary studies on whether or not a central bank digital currency should be considered ... and especially explore what policy objectives it would address," Andrew Kawere, the bank's director for national payments, told Reuters in an interview.
"Is it financial inclusion that we want to solve, is it payments, is it to support innovations in the financial space? That is an unanswered question."
African governments have approached digital currencies differently. Nigeria's central bank barred local banks from working with cryptocurrencies last year before launching its own digital currency, while Central African Republic last month adopted bitcoin as an official currency, an African first.
Mr Kawere said they had no timeline for concluding their studies or issuing a digital currency, but said they were particularly focusing on risks around the technology.
"Consumer protection - this is a very big concern for us as Bank of Uganda. In Uganda we have low levels of digital financial literacy ... the population needs a bit of protection from some of these fairly advanced financial innovations."
Mr Kawere said access would also be an issue when rolling out such a currency because of the low levels of penetration by the necessary infrastructure like smart phones, computers and the internet.
"It could lead to financial exclusion for those that can't have access (to the currency)."
He
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