If you have been observant lately, a friend, a family member or an associate could have invited you to join a crypto currency scheme in Uganda. Indeed, many people in the country, and more so in Kampala City, have taken to this new form of investment, as our investigations found out.
A crypto currency is a digital or virtual currency that uses cryptography for security. This makes it hard to counterfeit because of this feature. Most of the crypto currencies today are based on block chain technology; this has made some people call it network marketing at some point.
However crypto currency came into existence so many years ago, but it has been embraced so much 2009 when the first currency got to be known worldwide.
Bitcoin is the first crypto currency to come on market and it is still the most valued till date. Though many others have come up such as litecoin, one coin, the billion coin (TBC), ethereum, annex coin among others.
The most interesting part is that crypto currencies are not centralized money. Meaning there circulation is not controlled by the government, banks or any other third party. They are only for peer to peer transaction.
Cryptocurrency goes global
In the world today, many governments have accepted the new era of crypto currency, such as United Kingdom, United States of America, and china among others. Though some other countries are not interested in hearing about this idea claiming these will lead to a fall in their economy.
In Uganda today, the use of crypto currency is on the rise. Many Ugandans are embracing the idea. However many questions have come up on whether they can be trusted or not?
Most of the crypto currencies in exchange in Uganda are, Bitcoin, Bitcoin Cash, One Coin and the Billion Coin. In these quick money making ventures, Ugandans have rushed to sow for the future.
Bank of Uganda warns against Cryptocurrency
In spite of this gold rush, Bank of Uganda has warned the public to avoid joining crypto currencies, which it describes as fake and ponzi schemes. Despite the warning, a few Ugandans have continued rushing into them.
Joshua Twenya, IT personnel at Kampala international university is one of the people using crypto currency. He is a member of The Billion coin (TBC). According to him, he joined the currency in June 2016.
Joshua bought TBC coins worthy six hundred thousand Ugandan shillings and up to now his investment is still at the top. This gave him over 20 TBC coins and a huge return to his investment since that time. He believes that Ugandans should take advantage of the opportunity before it is too late,
“If you don’t move with change, you will live on earth like a ghost in the next three years. The world is changing, same as technology. No one is interested in moving with paper money (notes) and this is the reason why we have to go with crypto currency.”
However he says there are a number of challenges in this movement. One of them is the so many crypto currencies that are coming up every day. He says most of them are ponzis and only want to cheat people and run away.
He still has a challenge with making transactions for different things because it is still a peer to peer exchange rate and many people have not yet bought the idea.
Bwambale Nicholas, a prisons officer in the Uganda prisons commission is a member of “one coin” He joined this in early 2017. He purchased a package of 2000 coins. According to him, he is now a millionaire with this investment.
He is now looking forward to building a good looking commercial building and making more money. When asked about how much returns is expecting, he was not comfortable disclosing it but all he said is huge and unbelievable returns.
Joining these currencies is so expensive and it raises a question of doubt on whether these people will real achieve all that much. It appears that only those with substantial amounts of money, for now are the only people joining since it requires almost over half a million Uganda shillings for one to purchase the start up coins.
On 5th December, the financial investment authority (FIA) sent a report to the clerk of the parliament of Uganda titled “Pyramids and ponzi schemes” which was critical of crypto currencies. These included: mining capital coin (2018), One Thor (2015) and One coin (2016).
According to the report, the above have marketed themselves as the next bitcoin in order to give a number of Ugandans unsuspecting impressions that there value shall rise even more than those of bitcoin.
These have no ‘retailable’ products or services. For example for the case of one coin, Onecoin affiliates are only able to marke affiliate membership to their website only. The coin compensation plan resolves around affiliates joining and then investing in one coin “tokens”
There are five packages on offer for one coin, and these are: starter at 100 EUR, trader at 500 EUR, pro trader at 1000 EUR, executive trader at 5000 EUR and tycoon trader at 10,000 EUR.
Based on the amount of money one is awarded the one coin tokens as follows, a starter receives 1000 tokens, trader receives 5000 tokens, pro trader receives 10000 tokens, executive trader receives 30000 tokens and tycoon trader receives 60000 tokens. These tokens are “traded” on what one coin refers to as the “OneExchange” masquerading as a virtual asset; these are nothing more than scams according to FIA.
On February 14th 2017 and July 17th 2017, the Bank of Uganda (BOU) issued warnings to the general public about these crypto currencies suggesting that some of them are total schemes of stealing their money.
BOU further asked the public to continue using only the currencies that are allowed in the country and also regulated by the commercial banks according to the law.
However with all this, Kenyan health services provider, Land Spa has started taking Bitcoin and other crypto currencies as means of payment with a view to increasing accountability and averting losses.
Across East Africa crypto currency acceptance is on the rise, with at least two restaurants in Uganda and Kenya selling food for virtual currencies.
