Rwanda’s National Bank and CMA Draft New Regulations for Virtual Assets
Rwanda’s National Bank and Capital Market Authority roll out a draft law to regulate virtual assets, enhancing oversight and mitigating risks like money laundering. The regulation includes licensing requirements for service providers and prohibits the use of tokens to represent the Rwandan currency, aiming to create a transparent trading environment.
The National Bank of Rwanda (NBR) and the Capital Market Authority (CMA) have initiated a draft regulatory framework to govern virtual assets and their service providers. This framework seeks to oversee digital financial transactions, recognizing virtual assets as crucial components of the capital market. Under this proposed law, virtual assets are classified as digital representations of value, which can be traded, transferred, or utilized in payments and investments, irrespective of their underlying technology.
The regulatory framework aims to promote innovation while addressing potential risks such as money laundering and terrorist financing associated with virtual assets. Carine Twiringiyimana, the Manager of Licensing and Approvals at CMA, highlighted that the Financial Action Task Force has raised concerns regarding the potential misuse of virtual assets in money laundering, prompting the need for these regulations to provide clarity to the public and service providers.
The draft law was made public on March 6 to elicit public feedback and ensure transparency in the regulatory process. One critical aspect of the regulations is the prohibition of using tokens to represent the Rwandan currency, aimed at preventing misuse and manipulation of virtual assets. The legal framework intends to encompass not only digital currencies but also digital representations of tangible assets, facilitating secure and transparent transactions in both domains.
Twiringiyimana asserted that, with the new regulations, buyers would benefit from protection against unregulated transactions, ensuring that sellers uphold their commitments. Article 8 of the draft law mandates any entity wishing to provide virtual asset services to obtain a license from the CMA, which will establish the necessary requirements for compliance.
Crypto trader Gaspard Nsekambabaye stated that the regulation’s introduction could significantly aid buyers who frequently face scams when trading cryptocurrencies. He noted that many buyers transfer funds to sellers without receiving their purchased assets, resulting in significant losses. Twiringiyimana encouraged individuals affected by fraudulent transactions to seek help from the Rwanda Investigation Bureau (RIB), which will be equipped to handle financial crimes once the regulation is finalized. The establishment of clear rules for trading will enable transparent operations among virtual asset traders, with the CMA responsible for licensing and oversight of service providers.
In conclusion, the National Bank of Rwanda and the Capital Market Authority are taking significant steps to regulate virtual assets through a new draft law. This framework aims to promote innovation while addressing risks such as money laundering, ensuring a secure environment for digital transactions. With regulations in place, transparency and legal clarity will enhance the security of financial transactions in Rwanda, especially in the realm of cryptocurrencies and digital representations of real assets.
Original Source: www.newtimes.co.rw
