Rwanda publishes a draft to regulate virtual assets and provide clarity and monitoring

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Rwanda has taken an important step towards regulating digital asset transactions by publishing a draft law to manage virtual assets.

Addressing FATF concerns

Rwandan regulators recently released a draft law regulating virtual assets in Africa. The release of a draft, identifying the Capital Markets Agency (CMA), as the regulatory authority overseeing the virtual asset industry, is seen as an important step towards Rwanda’s goal of regulating digital asset transactions.

Local reports show that Rwandan financial authorities hope that the framework will help promote innovation while reducing the associated risks. The report cites Carine Twiringiyamana, manager of license and approvals at the CMA, and praises the release of a draft addressing concerns raised by the Financial Conduct Task Force (FATF).

“A significant concern raised by the Financial Action Task Force is the ability to use virtual assets as a channel for money laundering, so these regulations are being implemented to mitigate these risks, while also providing clear guidance to the public and virtual asset service providers,” Twiringiyamana said.

Rwandan’s draft crypto regulations, which were released to the public on March 6th, are said to provide legal clarity and surveillance of the digital representation of actual assets. The draft announcement comes just two years after the National Bank of Rwanda (NBR) warned financial institutions that it was engaged in crypto-related transactions. At the time, the NBR suggested that the ban would be lifted once the regulatory framework was implemented.

In addition to specifying the role of the CMA on virtual assets, the draft makes it clear that businesses seeking to provide virtual assets services must apply and secure approval from this regulatory authority. Section 10 of the draft reiterates that virtual assets are not recognized as fiat currency within Rwanda.

Similarly, the use of virtual assets as a means of payment of goods, services, liabilities, or other financial obligations within Rwanda is prohibited. Section 11 of the draft also states that it is not permitted to operate crypto mining facilities, virtual asset ATMs, or mixer or tumbler services.

Meanwhile, Twiringiyamana said individuals who are victims of Crypto fraud can forward complaints to the Rwanda Investigation Bureau (RIB), which is responsible for investigating financial crimes. However, once the proposed regulations are approved, the CMA assumes this and other liability.