The National Bank of Rwanda and the Capital Market Authority have proposed a draft law to regulate virtual assets and service providers, addressing risks like money laundering. This legislation defines virtual assets and aims to protect buyers and ensure transparency in transactions. The public has been invited to give feedback, marking an important improvement in the regulatory landscape of digital financial transactions in Rwanda.
The National Bank of Rwanda (NBR) and the Capital Market Authority (CMA) have unveiled a draft regulatory framework aimed at overseeing virtual assets and the services that facilitate them. As virtual assets, which include various digital representations of value, become more prominent in financial markets, this legislation proposes a comprehensive definition that encompasses assets trading on blockchain technologies and those backed by collateral for value stability.
The primary objective of this regulation is to balance innovation with the reduction of potential risks associated with virtual assets, including money laundering and terrorist financing. Carine Twiringiyimana, Manager of Licensing and Approvals at the CMA, highlighted the concern raised by the Financial Action Task Force about the potential misuse of these assets. The introduction of these regulations seeks to provide guidance to both the public and virtual asset service providers.
Public feedback on the draft law was solicited following its release on March 6. Twiringiyimana revealed that cryptocurrency is a prevalent form of virtual assets in Rwanda; however, regulations will also encompass tokenization, which represents physical assets. Notably, the use of tokens to symbolize Rwandan currency is prohibited, aimed at preventing misuse and enhancing legal clarity across transactions involving digital currencies and real-world assets.
With these regulations, buyers can expect increased protection against unregulated transactions, compelling sellers to fulfill their commitments to buyers. Article 8 of the draft law delineates that legal entities wishing to provide virtual asset services must secure a license from the CMA, which will assess necessary requirements.
Gaspard Nsekambabaye, a cryptocurrency trader, lauded the new regulatory framework, asserting that it could significantly safeguard buyers from scams often inherent in crypto trading. He pointed out that many buyers send money prior to receiving the assets, leading to substantial losses that are difficult to recover. He expressed optimism that seller registration could effectively mitigate this issue. Twiringiyimana added that individuals impacted by fraudulent transactions can contact the Rwanda Investigation Bureau (RIB) for assistance. Currently, the RIB investigates financial crimes, including those tied to virtual asset trading, despite cryptos being illegal in Rwanda, complicating victim justice.
Once this new regulation is ratified, it is anticipated to clarify the rules surrounding the trading of virtual assets, thereby fostering transparency among traders. The CMA will be tasked with critical responsibilities such as compliance monitoring, licensing service providers, and overseeing virtual asset operations.
The National Bank of Rwanda and the Capital Market Authority have initiated regulatory measures to oversee virtual assets, enhancing transaction security and clarity. These regulations will safeguard buyers from fraudulent activities, mandate seller registration, and prohibit the unauthorized use of Rwandan currency tokens. With the input from the public and directives for the Rwanda Investigation Bureau, the framework promises a more secure and transparent environment for trading virtual assets.
Original Source: www.newtimes.co.rw
