Inside Rwanda’s new virtual assets law primed to protect investors, consumers

Rwanda has adopted a new law regulating virtual asset business, establishing a legal framework for companies involved in cryptocurrencies, stablecoin, and other blockchain-based financial services. The regulations required to operationalise the law, which was published in Official Gazette on May 28, 2026, are being developed and are expected to be issued soon by the Capital Markets Authority (CMA). ALSO READ: What to know as virtual assets law takes effect Before settling on legislation, authorities conducted a national risk assessment examining both the opportunities presented by virtual assets and their potential threats, including money laundering, market manipulation and consumer fraud. The law was also benchmarked against international standards and regulatory frameworks in other jurisdictions. In an exclusive interview with The New Times, Jérôme Ndayambaje, Digital Innovation Analyst at CMA, explained why Rwanda decided to regulate the sector, the types of virtual assets covered by the law, the businesses that will require licences, and how the framework could support the country’s ambition to become a major international financial centre. Below are excerpts. Why did Rwanda decide that this was the right time to introduce a virtual assets law? The decision did not come overnight. Virtual assets have existed globally for more than a decade, and International Standards Setting Bodies started to advise countries to address the risks associated with them, including money laundering and illicit financial transactions. Countries generally have generally two policy options: prohibit virtual assets or regulate them. A third option is to maintain a status quo by leaving the sector unregulated, but this approval is not recommended by the standards, as it allow virtual asset activities to continue without appropriate oversight. In Rwanda, we conducted a risk assessment to understand both the challenges and the opportunities. The findings, which were released at the end of 2024, recommended establishing a proper regulatory framework rather than banning virtual assets. The law has also become necessary because we are seeing scams involving purported digital coins and fraudulent investment schemes. People are being persuaded to invest and, in some cases, are losing their money. ALSO READ: Parliament passes bill on virtual assets, cryptocurrencies The framework is therefore intended to protect consumers and investors, preserve the stability of the financial system, and mitigate risks, particularly those related to money laundering. Virtual assets can have implications for the existing financial sector, so it is important to ensure that their development takes place within a controlled and properly supervised environment. What categories of virtual assets are covered by the framework? We have considered three broad categories: unbacked virtual assets, stablecoins, and tokens representing real-world assets. Unbacked virtual assets are the category most widely known globally. These assets are not supported by an underlying reserve or physical asset, meaning they have no intrinsic value. Bitcoin is one example. Their value is largely influenced by market demand, investor sentiment, their communities, and confidence in the asset. The second category is stablecoins. These are designed to maintain a relatively stable value because they are backed by, or linked to, an underlying reserve asset. The reserve may, for example, be held in a currency such as US dollar or any other fiat currency. A stablecoin could therefore be designed so that one token is equivalent to one US dollar. The third category covers tokens representing real-world assets. Through tokenisation, rights or ownership in an existing asset can be represented digitally. These may have similarities with capital-market instruments, including shares and other securities. Any virtual asset proposed for issuance or trading in Rwanda will be assessed against the applicable requirements. Once it has met the required conditions and received approval, it may be listed on a licensed virtual asset exchange or platform. What will happen to individuals or companies currently offering crypto-related services informally? We have consistently advised people not to operate virtual asset businesses before a legal and regulatory framework is in place. The law provides penalties for unauthorised operations and other offences. Companies or individuals currently offering these services informally should stop and wait until the implementing regulations have been issued. We are working on the regulations and once they are in place, businesses wishing to operate in the sector will be required to apply for the appropriate licences and demonstrate that they meet the relevant conditions. ALSO READ: New bill proposes up to 5-year jail, Rwf100m fine for illegal virtual assets trading What kinds of businesses will be eligible to operate, and what will be required of them? The law broadly distinguishes between virtual asset issuers and virtual asset service providers. Issuers are entities that create or issue virtual assets falling within the recognised categories. The specific requirements will depend on the type of asset being issued. Once a virtual asset has been approved, it may be admitted to a licensed virtual asset exchange or platform through which users can buy, sell, transfer, or access other related services. Virtual asset service providers include exchanges, custodians, brokers, and businesses providing on-ramp and off-ramp services among othersand the details will be into the regulations currently being drafted. A virtual asset exchange provides the platform on which trading takes place. Custodians are responsible for safeguarding virtual assets, wallets, private keys and other related property on behalf of customers. Brokers facilitate transactions and execute or arrange orders for customers. On-ramp and off-ramp providers enable users to convert fiat currencies into virtual assets and convert virtual assets back into fiat currencies. They may also facilitate exchanges between different virtual assets. Each category will be subject to its own licensing and operational requirements, which will be further detailed in the regulations. Given the borderless and digital nature of virtual assets, how will CMA and the National Bank of Rwanda monitor operators and protect investors and customers? The law provides a basis for cooperation and information-sharing between domestic competent authorities and foreign regulators. Virtual asset transactions can involve businesses operating in different jurisdictions. Where a transaction is considered suspicious, authorities may need to request information from regulators or service providers in the country where the transaction originated or was processed. We will also use technological tools to monitor transactions and identify suspicious activity. Depending on the circumstances and the legal procedures involved, suspicious transactions may be flagged or frozen. The wider supervisory framework will include licensing, ongoing supervision, reporting obligations, and penalties for violations. Additional requirements will be established through the regulations, but the overall objective is to create a clear environment through which operators can be held accountable and consumers and investors can be protected. ALSO READ: Understanding digital money in the age of virtual assets How could the framework attract international blockchain and virtual asset companies to Rwanda? Are there any incentives for investors? The framework has been benchmarked against international standards and legal frameworks in other jurisdictions. We believe it is balanced, stable, and capable of attracting credible companies in itself without other incentives. Investors and businesses are more likely to enter a market when there is legal certainty and when the rules governing their operations are clear. A strong framework can provide confidence that the market is properly supervised, that legitimate businesses can operate fairly, and that consumers are protected. On the other hand, there are currently no long-term or short-term incentives planned. What would success look like over the next five years? The adoption of the law is already a major milestone. Over the next five years, success would mean having a trusted market that attracts credible businesses while effectively protecting retail investors and consumers. We would also expect that there will be no scams such as pyramid or ponzi schemes, no fake coins or fake investment platforms, operators across the ecosystem to be properly licensed and compliant with the law. Success would mean achieving market integrity, reducing manipulation and fraudulent activity, and ensuring that investors and consumers have confidence in the services being offered. A healthy market is one in which complaints and cases of investors and consumer harm are minimised, businesses follow the rules, and more responsible business are willing to participate. Rwanda aspires to become an international financial centre, and a trusted and well-regulated virtual asset sector could contribute to that ambition.

News

Inside Rwanda’s new virtual assets law primed to protect investors, consumers