In an ambitious move to position itself as a regional finance hub, Uganda has launched a pilot program for its central bank digital currency (CBDC), partnering with leading blockchain firms. This initiative aims to tokenize over $5 billion in real-world assets, despite facing significant challenges related to mobile adoption and infrastructure development.
Pioneering a New Financial Future
On October 8, 2025, Uganda’s Central Bank revealed its joint pilot initiative with the Global Settlement Network and Diacente Group. This venture is the preliminary step in a broader strategy focused on establishing Uganda as a cornerstone for tokenized finance in East Africa. By integrating over $5 billion worth of assets from key sectors such as agriculture, minerals, and renewable energy, the program promises to revolutionize Uganda’s financial landscape.
According to Ryan Kirkley, co-founder of Global Settlement Network, “We’re building infrastructure that goes beyond theory; a programmable economy grounded in real assets, regulatory collaboration, and mass accessibility.” The pilot is designed to decrease reliance on intermediaries, thereby unlocking capital flows and increasing transparency across domestic and cross-border investments.
Building the Digital Shilling: Features and Goals
Uganda’s CBDC will serve as a digital equivalent of the Ugandan shilling, supported by treasury bonds from the government. Developed on a permissioned blockchain, this CBDC is aimed at enhancing accessibility via smartphones, enabling users to engage with a digital economy without the necessity of traditional banking infrastructure.
As financial transactions migrate online, Kirkley emphasizes the potential to “close the gap between digital finance and real-world impact.” This shift is expected to not only facilitate smoother transactions but also democratize access to financial services, particularly in sectors where transparency and trust are paramount.
Navigating the African CBDC Landscape
Uganda finds itself amid a dynamic CBDC landscape that includes other African nations such as Nigeria, which launched the eNaira in 2021, and Ghana with its eCedi pilot. Countries like South Africa are exploring wholesale applications, collaborating through the Bank for International Settlements on cross-border settlements. This trend reflects a growing global recognition of the need for modernized financial infrastructure.
Bank of Uganda officials, including Andrew Kawere, have been conducting preliminary research to gauge the potential benefits of a CBDC. Interestingly, Uganda’s vibrant mobile money sector, with over 43 million registered accounts, serves as a foundation for this initiative, as reported by the Monitor. This widespread adoption has significantly improved financial inclusion, especially in rural communities.
Addressing Challenges Along the Way
Despite the optimistic outlook, Uganda’s CBDC pilot faces hurdles, particularly in mobile phone adoption rates, digital literacy, and existing infrastructure deficiencies. With only 65 percent of Ugandan adults accessing formal banking services, the risk of financial exclusion looms large, especially among vulnerable populations lacking smartphone access.
Deputy Governor of the Bank of Uganda, Augustus Nuwagaba, highlighted the high cost of currency printing, noting, “Our highest cost is printing money… most of you don’t even know how to handle money.” This statement underscores the urgency of shifting towards a more efficient digital currency model to combat ongoing issues like corruption and mismanagement that significantly drain national resources.
Looking Ahead: Reflection and Responsibility
The introduction of Uganda’s CBDC marks a significant milestone in its quest for financial innovation and economic empowerment. However, as the Bank of Uganda continues to explore the design and implementation of this digital currency, it is critical to remain vigilant about the potential implications of surveillance and corruption in this brave new financial world. Transparency and public trust will be integral to its success.
As Uganda embarks on this journey, it invites public participation, urging citizens to engage in discussions about the future of their financial systems. The path to becoming a central hub for tokenized finance presents both opportunities and challenges; navigating these will require collaboration, regulation, and a commitment to financial inclusion for all. Uganda’s progress in this endeavor could not only transform its economy but also set a precedent for other nations aiming to harness the benefits of digital currencies.
