Zimbabwe Embarks on Cryptocurrency Regulatory Framework

The Reserve Bank of Zimbabwe (RBZ) has announced plans to establish a comprehensive regulatory framework for cryptocurrencies. This move aims to address the growing use of digital assets in the country and bring it in line with international standards. According to RBZ Governor John Mangudya, the framework is necessary to protect consumers, maintain financial stability, and mitigate risks associated with cryptocurrencies. “We want to ensure that cryptocurrencies are traded in a safe and orderly manner, and that investors are aware of the risks involved,” he said. The framework will encompass regulations on: *

Issuance and trading:

Licensing and oversight of cryptocurrency exchanges and platforms. *

Custody and security:

Safeguarding of crypto assets and prevention of fraud and theft. *

Anti-money laundering and counter-terrorism financing:

Compliance with international standards to prevent illicit activities. *

Consumer protection:

Providing clear information and educating investors about cryptocurrency risks. The RBZ has established a working group to develop the framework, which is expected to be ready by the end of 2023. The group will consult with industry stakeholders, legal experts, and international organizations to ensure alignment with best practices. Zimbabwe is not the first African country to move towards cryptocurrency regulation. Nigeria, South Africa, and Tanzania have all taken steps to establish regulatory frameworks in recent years. Industry experts believe that Zimbabwe’s framework will provide clarity and encourage responsible adoption of cryptocurrencies in the country. The implementation of the regulatory framework is expected to enhance trust in the cryptocurrency market, attract foreign investment, and support the growth of innovative blockchain-based businesses in Zimbabwe.Zimbabwe has launched a public consultation on cryptocurrencies, seeking feedback from crypto service providers. The consultation exercise seeks to recommend an appropriate regulatory framework for cryptocurrencies and cryptocurrency service providers. As part of the national assessment process, a multi-stakeholder committee has been formed to consult with stakeholders in the cryptocurrency ecosystem.Zimbabwe has launched a public consultation on cryptocurrencies, seeking feedback from crypto service providers. The consultation exercise seeks to recommend an appropriate regulatory framework for cryptocurrencies and cryptocurrency service providers. As part of the national assessment process, a multi-stakeholder committee has been formed to consult with stakeholders in the cryptocurrency ecosystem. The invitation to participate is extended to all cryptocurrency service providers, whether based in Zimbabwe or outside the country but serving Zimbabwean customers. The government defines cryptocurrency service providers as individuals or entities that provide blockchain, cryptocurrency, or related services, such as cryptocurrency exchanges, brokers, traders, management providers, developers, miners, validators, and custodial and non-custodial wallet hosts. Participation involves completing a questionnaire, which must be submitted by June 26, 2024. According to the government, this initiative is consistent with global trends and best practices, with the aim of assessing and understanding Zimbabwe’s cryptocurrency and virtual assets landscape. Additionally, the government intends to assess the nature and extent of Zimbabwe’s cryptocurrency ecosystem, as well as associated risks such as money laundering, terrorist financing, and other illegal activities. Zimbabwe announced plans to launch a gold-backed virtual token, Zimbabwe’s gold-backed digital currency, in May 2023, with the intention of using it as legal tender alongside the Zimbabwe dollar and bonds. This measure was taken in response to the country’s currency crisis. In April 2024, Zimbabwe introduced ZiG (Zimbabwe Gold) to replace the Zimbabwe dollar, with the aim of establishing a credible national currency and boosting the economy. ZiG is now the country’s official currency, marking Zimbabwe’s sixth attempt at a functional local currency in 15 years. Additionally, Zimbabwe reinstated mobile money services to encourage adoption of the new currency. In April 2024, the Kenyan government established a multi-agency technical working group, including the Central Bank of Kenya, to develop a regulatory and monitoring framework for cryptocurrencies known as virtual assets (VAs) and asset service providers. virtual (VASP). This move by the Kenyan government came amid concerns over scams and money laundering.Zimbabwe is planning to develop a regulatory framework for cryptocurrencies, according to the country’s central bank governor, John Mangudya. Mangudya said that the Reserve Bank of Zimbabwe (RBZ) is working on a paper that will outline the proposed regulatory framework. He said that the paper will be presented to the cabinet for approval in the coming months. The RBZ has been studying cryptocurrencies for the past few years and has been engaging with stakeholders in the industry. Mangudya said that the central bank is taking a cautious approach to regulating cryptocurrencies, as it wants to ensure that they are used in a safe and responsible manner. The proposed regulatory framework is expected to cover a range of issues, including the definition of cryptocurrencies, the issuance of cryptocurrencies, the trading of cryptocurrencies, and the use of cryptocurrencies for payments. The RBZ is also considering setting up a regulatory body for cryptocurrencies. Mangudya said that the regulatory body would be responsible for overseeing the cryptocurrency industry and ensuring compliance with the regulatory framework. The development of a regulatory framework for cryptocurrencies is a significant step for Zimbabwe. It shows that the country is taking a proactive approach to regulating this new and emerging technology. The regulatory framework is expected to provide clarity and certainty for businesses and consumers who are interested in using cryptocurrencies.