Rwanda’s NBR and CMA have unveiled a draft framework to regulate virtual assets and service providers, aiming to enhance security in digital financial transactions. The proposed law addresses risks such as money laundering while promoting innovation. Public feedback is sought to ensure transparency, and the regulations prohibit certain practices like the use of tokens for Rwandan currency representation. Overall, the framework seeks to protect consumers and establish clear operational standards for virtual asset services.
The National Bank of Rwanda (NBR) and the Capital Market Authority (CMA) have proposed a draft law to regulate virtual assets and service providers, aiming to manage digital transactions in Rwanda. Defined as digital representations of value that may be traded or used for payments, this law encompasses assets secured through blockchain technology. The initiative seeks to promote innovation while addressing potential risks related to money laundering and terrorist financing associated with these assets.
CMA’s Licensing and Approvals Manager, Carine Twiringiyimana, noted that the Financial Action Task Force has highlighted concerns about the misuse of virtual assets for illegal activities, prompting the regulatory framework’s introduction. The draft law emphasizes transparency by inviting public feedback and aiming to clarify regulations for the general public and service providers. Notably, the regulations prohibit using tokens to represent the Rwandan currency to prevent misuse.
The proposed legal framework aims to provide oversight for both digital currencies and real-world asset representations, ensuring secure transactions. It mandates that sellers deliver as promised, thus protecting consumers from scams. Entities wishing to engage in virtual asset services are required to apply for a license from the CMA, which will set regulatory standards.
Crypto trader Gaspard Nsekambabaye believes this regulation could significantly protect buyers from scams, often seen when money is sent to sellers before receiving the assets. Instances have shown that buyers lose money through untraceable transactions. He supports mandatory seller registration as a measure to increase accountability.
Victims of fraudulent transactions can seek help from the Rwanda Investigation Bureau (RIB), which currently handles financial crimes, including those in virtual asset trading. However, the legal status of crypto trading complicates justice for victims. With the new regulations, clarity in the market is expected, bolstering trading transparency and compliance under the CMA’s oversight.
The proposed regulatory framework for virtual assets in Rwanda represents a significant step towards establishing a legal and secure environment for digital transactions. Focusing on transparency and consumer protection, the regulations aim to regulate service providers and address risks associated with money laundering. By inviting public input and creating a comprehensive legal structure, Rwanda positions itself to facilitate safe and accountable virtual asset trading.
Original Source: www.newtimes.co.rw
