People whose SIM cards were deactivated because they lacked National Identity cards line up at a
Some refugees in Uganda are transacting with bitcoin because they don’t have national identification cards, which are required to open a bank account and obtain other services in the country.
“Refugees in Uganda lack identification — a national ID — so they have no way of opening up bank accounts,” said Noble Nyangoma, former CEO of the Bitcoin Innovation Hub, at this year’s Oslo Freedom Forum.
Uganda is the largest refugee-hosting country in Africa, providing a home to over 1.6 million refugees and asylum seekers.
The Bitcoin Bitcoin +0.2% Innovation Hub, located in Kampala, the nation’s capital, teaches some of these refugees practical skills that help them to become small business owners. These skills include coding, how to do hair and makeup and food preparation.
The program also teaches the refugees how to earn, buy and spend bitcoin.
“Why bitcoin? With bitcoin, no one is going to ask you ‘Where is your national ID?’” added Nyangoma.
Uganda’s National ID System
The Ugandan government started its National Identification and Registration Authority (NIRA) nearly a decade ago, and approximately 60% of the nation’s citizens have enrolled in it.
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“A NIRA-issued ID card is now required to get a mobile SIM, transact in a bank, register to vote and get medical treatment,” reported Bloomberg.
The Ugandan government, led by President Yoweri Museveni, an ex-rebel who’s held power in the country since 1986, created NIRA in efforts to meet one of the United Nations’ sustainable development goals that included making legal identity a fundamental human right. However, these efforts have backfired, as those who aren’t included in the system are now mostly excluded from banking and public services.
What is more, it’s incredibly difficult to obtain a national ID in Uganda.
“Acquiring/replacing a national ID in Uganda is likened to the pain of getting a kidney donor,” said Edith Mpumwire, a native Ugandan and community leader for Bitcoin Dada, a in a tweet.
“Not to mention the fact that it's required for every major transaction, service and license acquisition. It's an act [of] segregation and human rights violation for those without it,” she added.
A report from the Center for Human Rights and Global Justice referred to the process of getting a national ID in Uganda as a “nightmare.”
Refugee IDs And Banking Issues
Mpumwire added some nuance, informing me in an interview that some refugees obtain a refugee ID, which grants them access to limited banking services.
However, she also shared that these are issued by the Office of the Prime Minister in Kampala, the country’s capital, and that the refugees in Uganda are often located in remote regions of the country, making it difficult for them to obtain such an ID.
“The refugee camps are very many kilometers away from the town centers,” Mpumwire told me.
She also stated that most banks prefer not to serve refugees.
“There’s also the trust issue, and banks do not trust easily,” said Mpumwire.
“They require really solid information like KYC, next of kin and location of one’s home. So, if someone is not permanently staying in Uganda, bankers would rather not deal with them, because in the case of any non-compliance issue, they probably don’t know where to find them,” she added.
Bitcoin In Refugee Camp Regions
Mpumwire is familiar with the work that the Bitcoin Innovation Hub does in Kampala, and she believes it’s very effective on a smaller scale. She said that encouraging the use of bitcoin in the country’s refugee camps could have an even bigger impact.
“If we are looking at mass bitcoin adoption, these refugee camps would be an ideal place to start,” explained Mpumwire.
“It would be good because even the banking agents that are there, they give just a few services, and a banking agent has limited float to be able to serve the entire refugee communities. If they had a peer-to-peer network [like Bitcoin], it would ease access to money,” she added.
With that said, Mpumwire acknowledged that it’s not enough to just have refugees using bitcoin between themselves. She said that it would be helpful if grocery stores, schools and hospitals began accepting it, as well.
While there’s some evidence of merchants accepting bitcoin in Kampala, this trend has not yet begun in the