Rwanda Government Orders Banks to Stop Facilitating Crypto-Related Transactions – Regulating Bitcoin News
According to the National Bank of Rwanda, the country’s regulated financial service providers are now prohibited from facilitating crypto-related transactions. In her January 31 letter justifying the decision, Acting Governor Soraya Hakuziyaremye cites the unregulated status of most cryptoassets and how this leaves users without the “guarantees and safeguards associated with regulated financial services.”
Rwanda’s growing interest in crypto
The National Bank of Rwanda (NBR) has said that the country’s financial services providers are prohibited from engaging in “any crypto-related activities until a regulatory framework is in place.” In a letter addressed to CEOs and managing directors of financial services providers, NBR Acting Governor Soraya Hakuziyaremye suggested that the ban would help ensure “efficient and sound financial services.”
Despite the central bank’s 2018 warning against crypto-related activities, Hakuziyaremye acknowledged in her letter that Rwandans have continued to trade digital assets such as bitcoin. According to the letter, available data suggests that “more than three million US dollars were traded on [the] Rwanda market since January 2020.”
Meanwhile, in the same letter, Hakuziyaremye sought to justify the central bank’s decision to prevent financial service providers from facilitating crypto-related transactions.
“Although crypto asset activities are still limited and therefore do not pose a significant risk to [the] The financial and monetary system in Rwanda, NBR is concerned about the involvement of the financial institutions in crypto activities,” Hakuziyaremye said.
Crypto-related activities lack “guarantees and safeguards associated with regulated financial services”
In the January 31 letter, the acting NBR governor cites the unregulated status of most cryptoassets and how this leaves Rwandan users without “the guarantees and safeguards associated with regulated financial services.” The letter also points to how crypto investors elsewhere have been defrauded by fraudsters such as Ruja Ignatova of Onecoin and Gerald Cotten of the Quadriga crypto exchange.
Hakuziyaremye’s letter also seeks to draw the attention of Rwandan crypto investors to the decisions that some regulators have taken against unregulated crypto entities.
“For example, Binance, whose presence was noticed in Rwanda, is under investigation in the United States due to allegations of money laundering. The same company has been banned by the Financial Conduct Authority (FCA) due to weak mechanisms for consumer- and investor protection, the acting governor said.
Register your email here to get a weekly update on African news delivered to your inbox:
What are your thoughts on this story? Let us know what you think in the comments section below.
Image credit: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or an endorsement or recommendation of products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is directly or indirectly responsible for damages or losses caused or alleged to be caused by or in connection with the use of or reliance on content, goods or services mentioned in this article.
