Zimbabwe Seeks Feedback On Crypto Regulatory Framework

2024-06-12 07:37:10

Julia Smith

Last updated:

June 12, 2024 11:37 EDT | 2 min read

Zimbabwe seeks feedback on its crypto regulatory framework as it combats inflation and tackles illicit financial activities.The government of Zimbabwe is looking for input on digital asset regulation as it begins to develop its own crypto framework while navigating a challenging inflation crisis, Bloomberg reported Wednesday.

Zimbabwe Seeks Input On Crypto Regulation

“In line with global trends and best practices, Zimbabwe is embarking on an exercise to assess and understand the cryptocurrency landscape,” the African nation’s government said in its state-run newspaper Herald on Wednesday.

According to Zimbabwe’s Information and Public Permanent Secretary, Nick Mangwana, the government is looking to put a lid on digital assets “misused for money laundering, terrorism financing, and other illicit activities.”

CRYPTO CURRENCY IN ZIMBABWE

In line with global trends and best practices, Zimbabwe is embarking on an exercise to assess and understand the crypto-currency (also referred to as virtual assets) landscape in Zimbabwe. The purpose of the exercise is to, among other things:… pic.twitter.com/FNhjjmxVmn

— Nick Mangwana (@nickmangwana) June 12, 2024

“Given the anonymity and decentralization that characterize these digital assets, it is crucial to identify and mitigate any associated risks,” Mangwana told local media outlet The Zimbabwe Mail.

The country’s government is “inviting cryptocurrency service providers” to share their commentary on regulatory practices and provide feedback on their potential policy implementation by no later than June 26.

Inflation, Economic Hardship Drive Zimbabwean Policy

Zimbabwe’s quest for a robust crypto framework comes as greater Sub-Saharan Africa faces a turbulent economy, with countries like Nigeria and Ghana struggling to find their footing amid concerning levels of inflation and increased interest in digital assets as an alternate means of currency.

Despite pushback from the International Monetary Fund (IMF), the Reserve Bank of Zimbabwe kicked off the launch of gold-backed digital tokens in hopes of addressing rising inflation concerns to limited success in May 2023.

By April of this year, the country had introduced yet another attempt to stabilize their longstanding financial crisis through a new currency called ZiG, marking the sixth time since the 2008 market crash.

“The introduction of ZiG represents an important policy action accompanied by several complementary policy changes — including monetary, exchange rate, and fiscal policy measures,” the IMF told Bloomberg in a recent emailed statement.

According to the Reserve Bank of Zimbabwe’s 2024 Monetary Policy Statement, the government is “recalibrating its monetary policy framework to re-anchor price and exchange rate stability and to boost confidence in the local currency.”

“The Bank’s priority policy focus is critical for supporting the economy’s growth prospects through the restoration of stability, convertibility, and transactional convenience of the local currency,” the organization stated.

According to blockchain analytics firm Chainalysis, Zimbabwe is currently ranked 103 in its 2023 Geography of Cryptocurrency Report, largely trailing behind Nigeria in second place.

However, with one of the worst economic disasters in global history, it may only be a matter of time before Zimbabweans choose to adopt crypto as their mainstream currency altogether.

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