Uganda Launches Shilling CBDC Pilot as Kenyan VASP Bill Clears Parliament

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As part of a wider initiative to create a tokenized digital economy in the country, Uganda has launched a pilot central bank digital currency (CBDC), creating a digital version of the Ugandan shilling on a permissioned blockchain backed by treasury bonds. Blockchain firm Global Settlement Network is collaborating with Uganda’s Diacente Group to implement the plans.

The initiative is in line with Uganda’s Vision 2040 and the African Union’s Agenda 2063 to drive development in the country and across the continent. Crypto.news reports the scheme is expected to create more than one million new jobs and lead to as much as $10 billion in exports each year.

The digital shilling is designed to conform with international compliance standards, including KYC and AML protocols. It is expected to support the tokenization of real-world assets across sectors such as agro-processing, mining, and solar energy. Odongo Solomon, CEO of Diacente, said the project “goes beyond infrastructure; it’s about unlocking long-term value for our people and our region.”

Nigeria launched Africa’s first CBDC in 2021, while Ghana and South Africa have also piloted digital currencies. 

Meanwhile, Uganda’s neighbor and fellow EAC member Kenya has taken significant steps toward formal crypto regulation. On October 7, the country’s Virtual Asset Service Providers (VASP) bill passed its third and final reading in parliament, and now only needs President Ruto’s signature to become law. It is unclear when this will take place.

The legislation establishes a regulatory framework for VASPs, including cryptocurrency exchanges, wallet operators, and token issuers. The Central Bank of Kenya will oversee payment and custody, while Kenya’s Capital Markets Authority will oversee investment and trading.