Reserve Bank of Zimbabwe working on a policy framework to regulate cryptocurrencies

• Zimbabwe was initially hesitant to legitimize cryptocurrency due to the high amount of fraudulent activity.
• However, it has finally realized that cryptocurrencies can no longer be ignored and that it has to be regulated.

The Reserve Bank of Zimbabwe (RBZ) announced that it is working on a policy framework to give crypto businesses clear guidelines and to protect investors from crypto scams. According to a Zimbabwe Chronicle report, the bank had long been hesitant to legitimize cryptocurrency due to the high amount of fraudulent activity. However, it has finally realized that they can no longer be ignored and that it has to be regulated.

Several alternatives to traditional banking are emerging alongside cryptocurrencies. These will all be given a clear framework to work from. RBZ deputy director of financial markets and national payment systems Josephat Mutepfa said:

We have already started to come up with a fintech framework because in regulation everything should be well structured. The framework, which is a regulatory sandbox, will be assessing the cryptocurrency companies as to how they are going to operate.

He noted that this move will ensure that all crypto firms were vetted to meet the regulatory requirements.

Once you enter the sandbox you either exist as a bonafide product to enter the market or you are guided to say that you need to partner a bank, a mobile money platform or your product needs to be licensed like a microfinance company… The sandbox will be an experimenting zone. Once the sandbox is there, there will be an application criterion, which will also act in the same capacity as the sandbox.

He further added that the crypto market is, at present, widely tapped by the younger generation who face many challenges to accumulating capital.

The challenge is that in the past the currency was a prerogative of central banks although it has been taken over by the digital currency who also operate within the currency of the country, which, therefore, minimizes loans coming forward.

He said that working out the interpretation of the monetary policy into all the official languages of the country could be a little challenging. Up until now, local businesses in Zimbabwe are reportedly welcoming the regulation. A representative from key cryptocurrency trading platform SPURT commented:

Meeting with the central bank will help us grow and attract the public to join the digital currency… We are now aware that there is a policy, which elaborates more on fintech guidelines that we need to follow.