The Lower Chamber of Parliament on Tuesday, May 5, approved the draft law governing virtual assets, marking a key step towards regulating cryptocurrency trading in Rwanda.

The bill seeks to regulate virtual asset activities, protect investors, and safeguard the financial system.

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Under the proposed framework, operating without authorisation will attract both prison sentences and financial penalties, with exact sanctions to be refined during further parliamentary scrutiny.

The legislation now awaits presidential assent and publication in the Official Gazette before coming into force. Detailed regulations will be developed after the law is enacted, according to the Chairperson of the Parlimentary Committee on Economy and Trade, MP Theogene Munyangeyo.

He said only operators that meet set requirements will be allowed to operate once the framework is fully implemented.

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Presenting the bill, Munyangeyo noted that digital assets are increasingly being transferred globally in a similar way to traditional currencies, with more than one billion people worldwide participating in crypto-related activities.

He also cited data indicating that over 700 million people hold virtual assets globally, with about 70 million active users. The global crypto market capitalisation stands at about US$2.35 trillion, with Bitcoin accounting for 57.9 per cent, followed by Ethereum at 10.6 per cent, Tether at 5.9 per cent, and USDC at 2.38 per cent, according to industry sources.

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Regionally, he said crypto adoption continues to grow, with an estimated 4 million users in Kenya, 2 million in Uganda, 1.5 million in Tanzania, and about 350,000 in Rwanda.

Munyangeyo said that if well regulated, virtual assets could attract investment, support faster and cheaper cross-border transactions, improve liquidity through tokenisation of real-world assets, and promote innovation, job creation, and tax revenue.

However, he warned of risks, such as anonymity that facilitates criminal activity, fraud, and money laundering. He noted that the Rwanda Investigation Bureau (RIB) had recorded at least 35 cases linked to fraudulent schemes and pyramid structures.

He also highlighted risks linked to price volatility, potential investor losses, and possible spillover effects on the broader financial system if virtual assets are widely used without safeguards.

"The lack of regulation can expose investors to fraud and scams that promise unrealistic returns,” he said.

The bill also criminalises unauthorised promotion of virtual assets, with fines and possible imprisonment for individuals and companies involved in illegal marketing. Board members of licensed entities who provide false information or obstruct regulators will also face sanctions under the proposed law.

Speaking to The New Times, digital innovation analyst at the Capital Market Authority, Jérôme Ndayambaje, said the law sets out general principles, while detailed implementation will be defined in subsequent regulations.

He said the Capital Market Authority will serve as the main regulator, working alongside the National Bank of Rwanda.

Ndayambaje added that the framework will also define how new virtual assets are issued or listed, including those originating outside the country.

He noted that consultations with stakeholders, including industry players and regulators, began in 2024 with a risk assessment, followed by policy development and drafting in 2025.

"We engaged extensively with industry players,” he said, adding that public awareness and further consultations will continue as the country moves towards implementation.

Criminal, corporate and regulatory sanctions under new virtual assets law

The draft law introduces a structured penalty regime covering individuals, companies, and regulatory breaches in virtual asset activities.

Criminal offences (individuals)

Running a virtual asset (VA) business as a natural person will attract a fine of Rwf30 million to Rwf50 million, a prison term of three to five years, or both.

Illegal payments, operating crypto ATMs, mining facilities, or mixer services will be punishable by a fine of Rwf20 million to Rwf30 million, a prison term of two to three years, or both.

Providing false information or obstructing supervision by the Capital Market Authority will attract a fine of Rwf3 million to Rwf5 million, a prison term of six months to one year, or both.

Corporate offences (legal entities)

Operating virtual asset services without a licence will attract a fine of Rwf70 million to Rwf100 million.

Issuing virtual assets without approval will also attract a fine of Rwf70 million to Rwf100 million, the same penalty applied to illegal payments services, crypto ATMs, mining, or mixer operations.

Unlicensed marketing or advertising of virtual assets will attract a fine of Rwf15 million to Rwf20 million.

Administrative sanctions

Detailed administrative penalties will be set by Capital Market Authority, giving the regulator flexibility to address minor compliance breaches that do not amount to criminal offences.

Regulatory sanctions (non-criminal)

The Capital Market Authority will also have powers to suspend or revoke licences, effectively shutting down operations without criminal proceedings.

The highest penalties, capped at Rwf100 million, target unlicensed operations and unauthorised issuance of virtual assets, underscoring the law’s focus on keeping the sector within a regulated framework.