Zimbabwe is Taking Steps to Regulate Cryptocurrencies

The Reserve Bank of Zimbabwe is ready to regulate cryptocurrencies. Zimbabwe is on the deep humanitarian and economic crisis, says International Monetary Fund (IMF).

17 March, 2020 | AtoZ Markets – Zimbabwe is known for its history of hyperinflation. The Zimbabwe dollar already saw three redenominations to remove excess zeros since its introduction. In 2009, Zimbabwe officially became a country without its own fiat currency. Instead, it is using a combination of several foreign currencies such as the South African rand and the US dollar.

Zimbabwe Returns to Crypto 

The Reserve Bank of Zimbabwe (RBZ) is ready to regulate cryptocurrencies after banning local banks from processing cryptocurrency payments in 2018.

RBZ is developing a regulatory sandbox for cryptocurrency companies in the country. The local newspaper Chronicle reported the news, citing a bank representative speaking at a conference on 13 March. Deputy director of financial markets and national payment systems at the RBZ, Josephat Mutepfa said:

“We have already started to develop a fintech framework because, in regulation, everything must be well structured. The framework, which is a regulatory sandbox, will make it possible to evaluate cryptocurrency companies as to how they will operate.”

The sandbox would help the bank to decide whether a particular business can allow operating independently. said Mr. Musephat:

“Once you enter the sandbox, either you exist as a bonafide product to enter the market, or you are guided to say that you must be a partner of a bank, a mobile money platform or that your product must be licensed as a microfinance company. “

According to Musephat, the growing popularity of crypto among younger generations in the country motivated the decision to regulate crypto. Moreover, younger generations are facing the challenge of having capital. He also admitted that digital currencies pose a regulatory problem because currency “is a prerogative of central banks”.

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The Central Bank Banned Cryptocurrencies In 2018

The RBZ initiative seems to be important, since, in May 2018, the central bank prohibited local banks from negotiating or processing payments linked to cryptocurrencies. RBZ Governor John Mangudya at the time said:

“The Reserve Bank has ordered all banking institutions not to provide banking services to facilitate the processing or settlement of virtual currency to any person or entity”.

Zimbabwe is going through an economic and humanitarian crisis, according to the International Monetary Fund (IMF). However, it remains to see whether the crypto regulations in place will help Zimbabwe to revive its economic situation.

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