Cryptocurrency dealers in Uganda have called for calm amid the declining prices of bitcoin worldwide.
The price of a bitcoin is currently about $5,000, down by nearly thirds compared to the value of $15,000 around November last year. This has raised concerns that the digital currency is worth not investing in and many investors have since quit.
However, Mr. Noah Baalessanvu, the director of the Blockchain Association of Uganda, has urged Ugandan cryptocurrency traders not to be scared by the global downturn of the currency, arguing that the declining value in those other countries is caused by problems of fraud and lack of trust which can be avoided among traders.
“The problem is that many people go into Cryptocurrency trading with very limited knowledge about how it operates,” said Mr. Baalessanvu in an interview on Tuesday, August 21.
He added: “When you understand that the currency is digital and then get to learn the dynamics of online trading, then you will begin to appreciate the value of cryptocurrencies.”
Mr Baalessanvu also blamed the declining value on global speculators and negative publicity by some economists who fear losing control of economies since trading goes virtual with online trading under bitcoin.
Speaking at the Africa Blockchain Conference at Kampala Serena hotel in May this year, Bank of Uganda Governor Emmanuel Tumusiime-Mutebile told the meeting that blockchain technology lacks the necessary prerequisites to work as a currency and that people who sell cryptocurrencies risk being burned when the bubble eventually bursts. He cautioned that no cryptocurrency can match the legality of a national currency adding that the technology can only succeed in the presence of a legal provision to give a currency status to a crypto.
However, Mr. Baalessanvu has said Uganda has more to benefit than lose in the digital currency.
“I want to specifically address the current benefits that a country like Uganda can derive from blockchain We’re currently dealing with uncertainty in the land tenure system where we have titles that cannot be trusted. When we put these land titles unto the blockchain, we’ll inherently give digital land titles trust because blockchain addresses the common problem of duplication. Once our land tenure system is on the blockchain its immutable – meaning once a land title gets unto the blockchain, it can only be transacted upon legitimately because it’s being witnessed by a number of parties,” he said.
Analysts say Cryptocurrencies have suffered a decline after major markets such as China, South Korea and trading platforms such as Google and Facebook banned them. China banned all websites that offered cryptocurrency trading services in the country at the start of this year. The country has also banned anonymous trading accounts and underage traders from trading in the cryptocurrency, with its Financial Service Commission claiming that the Government is ‘’considering shutting down all local virtual currency exchanges’’.