Zimbabwe to introduce crypto regulations
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Loading... - Brenda Kioki
- 03 Oct 2024
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Zimbabwe is preparing to introduce its first-ever cryptocurrency regulations, marking a significant policy shift from its 2018 ban, when the Reserve Bank of Zimbabwe (RBZ) prohibited banks from processing cryptocurrency transactions. The government’s appointed National Risk Assessment Coordination Committee (NRACC) began consultations with crypto stakeholders in May 2024 to develop a regulatory framework, and those consultations concluded in June.
For stakeholders in Zimbabwe's crypto industry, this development represents a major step towards legitimizing the sector. The proposed regulations, which could include licensing crypto exchanges, are seen as crucial to providing a formal structure and safeguarding users from fraud and financial losses. NRACC has encouraged crypto players to form lobby groups to facilitate direct discussions with regulators.
Vusa Chimanikire, founder of the fintech startup Entry, noted that engaging directly with regulators offers a better path to creating scalable products than operating without clear guidelines. Zimbabwe’s history of currency instability has driven many citizens to use alternative platforms like Binance and Coinbase, along with local crypto exchange Golix, which was shut down by the 2018 ban. However, the absence of regulation prior to the ban resulted in significant financial losses for users.
Licensing crypto asset service providers (CASPs) is essential for moving the sector forward, but for this to happen, cryptocurrency must first be recognized as a legitimate financial asset. Since the ban, crypto-related businesses have struggled to operate as they cannot open bank accounts and have relied on platforms like PayPal and Payoneer to move funds.
The lack of formal regulation led to speculative underground trading and an increase in crypto scams, such as a notorious case in May 2024, where Zimbabwean ophthalmologist Dr. Solomon Guramatunhu lost over $100,000 in a crypto scam. Licensing would allow users to work with verified intermediaries and could help rebuild trust in the industry.
For market analyst Valentine Muhampa, regulated crypto could introduce more competition to Zimbabwe's peer-to-peer transaction space, currently dominated by mobile money, cash transactions, and bank transfers.
For now, the industry waits for the introduction of this regulatory framework, which would turn a once unregulated sector into a more structured and trustworthy one.
