The Legislative Landscape of Cryptocurrency in Sudan Prior to 2023

As of the years leading up to 2023, the legislative landscape for cryptocurrencies in Sudan was marked by a lack of specific regulation, coupled with a general caution advised by the Central Bank of Sudan. This article explores the key elements of Sudan’s approach to cryptocurrency regulation during this period.

Ambiguous Legal Status and Absence of Regulation

In Sudan, the use and trading of cryptocurrencies such as Bitcoin, Ethereum, Litecoin, Dogecoin, Tether, Cardano, USDT, XRP, and Monero were not explicitly illegal. However, the Central Bank of Sudan had issued warnings against their use, citing concerns about potential money laundering, terrorism financing, and other risks associated with the unregulated nature of digital currencies. The lack of regulation did not imply endorsement or legal protection for the use of cryptocurrencies​​.

Warnings from the Central Bank of Sudan

While the Central Bank of Sudan did not officially recognize cryptocurrencies, it cautioned citizens about the risks of dealing with digital currencies. These risks included financial loss due to price volatility, lack of consumer protection, and the potential for use in illegal activities. Despite these warnings, popular cryptocurrencies like Bitcoin and Ethereum were gaining traction in Sudan due to their potential for high returns​​​​.

Sudan’s Legislative Context

Sudan’s existing legislation, such as the “Electronic Transactions Act, 2007,” addressed electronic payments in general but did not cover cryptocurrencies, which emerged after the enactment of this legislation. The law focused on protecting the secrecy of information and detailing the electronic contracting process, but it did not provide a framework for the regulation of digital currencies​​.

Digital Transformation and Future Prospects

In June 2020, Sudan joined the “Better Than Cash Alliance” as part of the government’s Digital Transformation Agency’s efforts to modernize government services and payment systems. This alignment with digital transformation might facilitate future adoption and regulation of cryptocurrencies at the state level​​.

Safety Concerns and International Context

According to Cointobuy’s analysis, cryptocurrency-related activity in Sudan was considered to have a very low safety rank. This was primarily due to the lack of regulation, with several Initial Coin Offerings (ICOs) banning participation by Sudanese residents. Sudan ranked very low in terms of cryptocurrency safety globally, indicating the need for regulatory measures to ensure security and protect against illegal activities​​.

Conclusion

In summary, the legislative landscape for cryptocurrencies in Sudan prior to 2023 was characterized by an absence of specific laws or regulations, warnings from the Central Bank, and a general lack of legal clarity. This created an environment where cryptocurrency activities were neither fully illegal nor officially sanctioned, leading to a situation where individuals and businesses operated in a regulatory vacuum with respect to digital currencies. The absence of clear guidance or a regulatory framework meant that those engaging in cryptocurrency in Sudan did so at their own risk, with little to no protection against the associated risks.