Bank of Uganda has revealed plans to consider legalization of the use digital currencies in Uganda, although no time frame has been attached to this policy as more studies have to be carried out.
The revelation is contained in the June 2025, Final Report of the Consultation on Central Bank Digital Currency for Uganda National Payment Systems Department, Bank of Uganda that was recently issued.
“Based on the findings from the public consultation, our overall assessment is that the potential issuance of a CBDC in Uganda warrants consideration and further study. Bank of Uganda recommends a phased approach that would include the following key activities: Conduct a detailed feasibility study to assess the costs and benefits. We intend to involve procurement of a technical partner/vendor,” reads in part the assessment report.
The Central Bank further added, “Contingent on the findings of the feasibility study, undertake a pilot program to be tested under the regulatory sandbox. This shall involve further stakeholder consultations to refine the design principles and public awareness to create awareness. A final decision on the CBDC shall be made after evaluating the results of the pilot study.”
The latest stakeholder’s validation workshop was held on 4th March 2025, to review the draft report of Stakeholder consultation of CBDC for Uganda and during this meeting, stakeholders discussed the potential implications of a CBDC in Uganda.
According to the Central Bank, experts that included Paul Busharizi, Rashmi Pillai, Alice Namuli, and Reginald Tumusiime who debated opportunities and challenges, highlighting the need for functionality and public trust ahead of the introduction of digital currencies, and the group also discussed the potential impacts on commercial banks and the informal sector, infrastructure limitations, cybersecurity risks, public awareness, and implementation costs.
The purpose of the consultation was to assess stakeholder views on the potential issuance of a Central Bank Digital Currency (CBDC) in Uganda and the argument was premised on the understanding that the issuance of a Central Bank Digital Currency would aid in modernizing Uganda’s payment systems, fostering financial inclusion, and supporting the digital economy.
During the March 2025 meeting, a survey was undertaken whose key findings indicated that 83.4% of respondents trust a CBDC as a safe and reliable digital payment method, 78.8% would prefer using a CBDC over cash, 88.7% agree that a CBDC would have a positive impact on the economy, 70.9% believe it would reduce currency-related costs and 60.3% think Uganda’s decision should be influenced by other countries, particularly East African Community (EAC) partner states.
Bank of Uganda highlighted a number of opportunities that Uganda would get with the issuance of a CBDC include; Cost reduction in managing and distributing physical currency, increased financial inclusion by reaching underserved populations, enhanced payment efficiency, innovation, and security and improved cross-border trade and regional financial integration
The engagement also highlighted a number of challenges that would affect the introduction of digital currencies with inadequate infrastructure: unreliable internet, electricity issues, and low smartphone penetration, ranking high on the agenda, while these challenges are further compounded with cybersecurity concerns and risks to data privacy.
The stakeholders also raised concerns about the potential negative impact on commercial banks and the informal sector, as well as the limited public awareness and digital literacy.
At the time Bank of Uganda engaged with stakeholders in March 2025, 134 countries had either launched, piloted or are exploring CBDC. In Africa, the Central Bank of Nigeria launched the “e-Naira”, in 2021 while the Bank of Ghana piloted the “e-Cedi” in the same year (Kiff, 2024).
At the regional level, in the East African Community (EAC), Rwanda and Tanzania are exploring CBDCs while Kenya issued a CBDC discussion paper and deferred its implementation noting that a CBDC it may not be priority for the country in the short to medium term (CBK, 2022).
“The Bank of Uganda (BOU) acknowledges that introducing a CBDC may represent a significant advancement in payment systems. However, it recognizes potential risks and challenges with this innovation. BOU understands that adopting a CBDC is complex and multidisciplinary, requiring active engagement from all stakeholders, including the private sector. While payment innovations have often been driven by private sector, operating and ensuring payment systems’ safety and efficiency has long been a key mandate of central banks. It is against this background that the Bank of Uganda issued a “Consultation Paper” to bring to the fore the pertinent issues relating to the development of CBDC,” as noted in the report.
