Uganda could be the first African country to regulate digital currencies - if one of the first steps towards crafting Bitcoin regulation in the country is not blocked.

The United Nations African Institute for the Prevention of Crime and the Treatment of Offenders (UNAFRI) released a report from its first round table discussion on policy, legal, ethical and socio-cultural issues surrounding the regulation of virtual currencies in Uganda.

According to the report, participants agreed to the development of instructive guidance underpinned by principles that would be informed by academic research, scholarship and data from the financial regulators to preserve financial stability and legal certainty.

They also agreed to form a think tank to share expert knowledge and practice and to generate a body of research.

Aside from helping prevent the illegal use of digital currency exchanges to launder money, drug trafficking and tax-related crimes, regulation has proven to increase the legitimacy of digital currencies within the public domain, specifically in countries that have moved on to introduce some form of regulation. According to market reports, the yielded outcomes have been positive.

After a bill was passed to regulate Bitcoin in Japan in May, it rose to become the second largest Bitcoin market in the world after China, toppling the United States. Bitcoin users in the country now pay their electric bills with digital currencies and save money.

After the Swiss parliament moved to regulate on Bitcoin and Blockchain-based startups in June, several initiatives that adopt Bitcoin use have been introduced in the country. A Swiss town, Zug, began to accept Bitcoin payments for certain city services. Today, Switzerland now allows Bitcoin use for buying train tickets and is sold in kiosks across the country.

Korea and Dubai are gearing up to become the next to regulate Bitcoin.

While the regulation of digital currencies has been a major topic globally and African central banks in Kenya, Zimbabwe and South Africa warning against its use until it has been fully studied, the business angle to it has been moving on, albeit slowly. Several Bitcoin-accepting initiatives have been going on across the continent especially for remittance purposes.

With suggestions in some quarters that the use of digital currencies may bode well for Africans at home and abroad especially in countries that are experiencing hyperinflations coupled with the growing level of awareness, all eyes would be on the precedent that would be set by the first African country to regulate them.

By the time a second meeting for the Ugandan proposal would hold on the same date in 2017 and include a wider range of stakeholders including from the Judiciary, law drafters and other East African countries, according to the report, the feedback the organisers would have received will help determine the direction the next round table discussion will take.