Ugandans are better off investing their money in cows than plunging into the unknown world of cryptocurrencies, Stanbic bank chief executive Patrick Mweheire has said.
A Cryptocurrency is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank of any country. This implies that anonymous people are in control of the system handling this digital currency.
Mweheire, who is also the chairman of the Uganda Bankers’ Association (UBA), said the cryptocurrencies were being given undue attention in the press than they deserve, ultimately confusing the people about their value.
Mweheire informed a gathering at Sheraton in Kampala that the entire value of cryptocurrencies around the world was just USD 1trillion, the same size as one company like Apple. He said crypto’s are not backed by any assets and that the lack of regulation anywhere around the world makes them a no go zone.
Mweheire’s remarks come at the heels of reports of fraud cases involving cryptocurrencies where many Ugandans have been scammed billions of shillings.
On Monday, the media reported that Ugandans had been conned up to 10 billion Shillings through Dunamiscoin Resources. A week earlier, there were reports of billions of shillings paid to unknown people running a cryptocurrency company called Global crypto currency.
Earlier in November, it was revealed that Ugandans who had bought into One Coin had been scammed. The coin promoters approached farmers in Ntungamo and other districts after harvest, scamming them of millions of shillings, according to a BBC report.
Government has been categorical about cryptocurrencies. In September, Finance Minister Matia Kasaija issued a strong warning to Ugandans investing in cryptocurrencies, saying the government does not recognize them and citizens are on their own. Bank of Uganda has also told people to stay away from anything cryptocurrencies.
Cryptocurrencies were made popular around 2014 when the value of Bitcoin, another cryptocurrency, surged. The coin hit USD 20,000 each although it has since fallen to below USD 10,000. Despite the buzz around them, central banks around the world have failed to regulate the sector and have told people to tread carefully if they are to invest in them.