The National Bank Of Rwanda has declared that all regulated financial service providers are now banned from conducting any crypto-related activities. Acting Governor Soraya Hakuziyaremye underlined the lack of regulation surrounding digital assets and how this leaves customers without the assurance of conventional financial services.
Rwanda’s Renewed Attention On Cryptocurrencies
The National Bank Of Rwanda (NBR) has declared that all regulated financial service providers in the country are now prohibited from participating in any activities related to cryptocurrencies until a regulatory framework is put in place. In a letter addressed to the CEOs and managing directors of financial service providers, NBR Acting Governor Soraya Hakuziyaremye justified the choice by stating that it would help guarantee the security and effectiveness of their services.
This ban comes in spite of a 2018 warning from the central bank against cryptocurrency-related activities. In the same letter, however, Hakuziyaremye noted that Rwandan citizens continue to trade digital assets such as bitcoin. According to the letter, available data shows that “over three million US dollars had been traded in [the] Rwanda since January 2020.” The statistics were used to support the decision of the central bank to ban financial services providers from facilitating crypto-related transactions.
“Although cryptoactive activities are still limited and therefore do not pose substantial risks to [the] Rwandan financial and monetary system, the NBR is concerned about the involvement of financial institutions in crypto activities,” Hakuziyaremye said.
Lack of “guarantees and safeguards associated with regulated financial services”
In the Jan. 31 letter, NBR’s acting governor cites the unregulated status of most crypto assets and how this leaves Rwandan customers without the “guarantees and safeguards associated with regulated financial services.” The letter also includes a note describing how crypto traders have been deceived by crypto fraudsters such as Onecoin’s Ruja Ignatova and Quadriga’s Gerald Cotten.
Hakuziyaremye’s letter is also intended to draw attention to the decisions made by regulators regarding unregulated cryptocurrency entities. Crypto traders should remain vigilant when it comes to these activities.
“For example, Binance, whose presence was noted in Rwanda, is under investigation in the United States of America for allegations of money laundering. The same company has been banned by the Financial Conduct Authority (FCA) due to weak consumer and investor protection mechanisms,” the acting governor was quoted.
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