Zimbabwe is seeking feedback on its regulatory framework for cryptocurrencies in an effort to combat inflation and address illicit financial activities. The government is reaching out for input on digital asset regulation as it works on developing its own crypto framework amidst a challenging inflation crisis, as reported by Bloomberg on Wednesday.
The African nation’s government, as stated in the state-run newspaper Herald, is aligning with global trends and best practices by assessing and understanding the cryptocurrency landscape. Nick Mangwana, Zimbabwe’s Information and Public Permanent Secretary, emphasized the importance of identifying and mitigating risks associated with digital assets, particularly in terms of money laundering, terrorism financing, and other illicit activities.
Cryptocurrency service providers are being invited to share their views on regulatory practices and provide feedback on potential policy implementation by June 26. This move comes at a time when Zimbabwe, along with other countries in Sub-Saharan Africa like Nigeria and Ghana, is grappling with economic hardship and high levels of inflation, leading to increased interest in digital assets as an alternative form of currency.
Despite resistance from the International Monetary Fund (IMF), the Reserve Bank of Zimbabwe launched gold-backed digital tokens in an attempt to address rising inflation concerns in May 2023. Subsequently, the country introduced a new currency called ZiG in April of this year, marking the sixth attempt to stabilize the financial crisis since the 2008 market crash.
The IMF praised the introduction of ZiG as an important policy action accompanied by various complementary measures to boost stability and confidence in the local currency. The Reserve Bank of Zimbabwe is recalibrating its monetary policy framework to enhance price and exchange rate stability and increase confidence in the local currency, according to the 2024 Monetary Policy Statement.
Despite being ranked 103 in Chainalysis’ 2023 Geography of Cryptocurrency Report, Zimbabwe is trailing behind Nigeria in terms of cryptocurrency adoption. However, with its history of economic challenges, it may only be a matter of time before Zimbabweans embrace crypto as their primary currency.
