Uganda has initiated a central bank digital currency (CBDC) pilot, integrating a digitized form of the Ugandan shilling on a secure blockchain backed by treasury bonds. This comes alongside Kenya’s progress in establishing a regulatory framework for cryptocurrencies, with its virtual asset service providers (VASP) bill recently passing parliament.

In collaboration with the Global Settlement Network (GSN), the Ugandan Diacente Group aims to tokenize $5.5 billion of tangible assets. This partnership was publicly announced on Wednesday, marking a significant stride in Africa’s focus on digital financial models.

Uganda’s CBDC Underpinned by Treasury Bonds

The digital currency has been developed on a permissioned blockchain, ensuring compliance with local and global standards like Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols. This pilot project seeks to enhance digitization across key sectors, thereby promoting sustainable economic growth.

Edgar Agaba, Chairman of Diacente Group, stated:

“By integrating tokenization and CBDCs into Uganda’s development roadmap, we’re creating transparent, tech-driven ecosystems that attract new capital, empower local industries, and scale sustainable growth from the ground up.”

Nigeria led the charge among African nations by launching a CBDC in 2021, with several countries like Ghana and South Africa also exploring similar initiatives. Meanwhile, Kenya’s crypto framework, focusing on consumer protections and industry regulations, is poised to revolutionize the market pending presidential approval.

The Growth of Africa’s Crypto Sector

Statistics project that Africa’s crypto user base will exceed 75 million by 2026, with notable revenues anticipated. Current estimates indicate that stablecoins represent a significant portion of transaction volumes across the continent, underscoring the rising trend of digital assets in the region.

For further reading, check out related resources on cryptocurrency’s impact in Africa.