The Bank of Uganda has cautioned the general public against doing business with the new digital currency which he says is not regulated.
Currently multinational companies have initiated several new digital based investments where people are asked to invest in digital coins that accumulate interests periodically.
Speaking during the 2nd round table discussion on crypto currency, Stephen Mulema the director financial markets at Bank of Uganda said this field is not regulated, making it more risky.
He said that cyber criminals have invaded this virtual business, making it more unreliable and insecure.
Dubbed One Coin, the crypto currency located on the website onecoin.eu recently launched in Uganda and has opened up offices in Kampala.
According to a statement by the governor of the Central Bank, Emmanuel Mutebi, One Coin Digital Money has not been licensed and dealing with them would be at one’s own risk.
“One Coin Digital money is not licensed by BoU under the under Financial Institutions Act 2004 and is therefore conducting business outside the regulatory preview of the BoU,” the statement reads in part.
Although the company is still in its formative stage, BoU noted that they have been aggressively encouraging members to buy digital money promising very high returns and rewards on First come – First serve basis.
The company which claims to have millions of customers in 195 countries across the globe promises to empower them by providing borderless, low-cost financial transactions and connecting them to the financial world.
Mutebile warned the public that whoever invests their hard earned savings with the company or any other crypto currency companies would be taking a huge risk in the financial space where there is neither investor protection nor regulatory purview.
“The public is strongly encouraged to do business with only licensed financial institutions,” cautioned the Central Bank Governor.
Digital currencies have proven effective in Western countries with the leader, Bitcoin registering tremendous success.
Over the past 12 months, bitcoin has quadrupled in value, clearing $1,100 although the currency remains unregulated which raises skepticism amongst investors.