Crypto Regulation in Zimbabwe
Cryptocurrency use in Zimbabwe is currently legally prohibited. Despite this, several Zimbabweans covertly trade in Bitcoin and other cryptocurrencies. A major characteristic of Zimbabwe is its large percentage of nationals that live abroad. A report on whether Zimbabwe is softening its hard line position on cryptocurrency reveals the large number of Zimbabweans that live abroad and how Blockchain technology forms an inevitable part of Zimbabwe’s digital financial activity.[20] The mere sending of money to relatives enables and opens up the digital money market. Thus, with or without centralized cryptocurrency trading, money transfers alone expand the uses of block chain technology.
Source: Gambe Law Group
On December 20, 2017, the Reserve Bank of Zimbabwe issued a statement declaring that virtual currencies did not have legal tender status in Zimbabwe. Moreover, the Reserve Bank of Zimbabwe issued the following public warning regarding cryptocurrencies:
[T]he use of and trading in cryptocurrencies or virtual currencies is not regulated by the country’s laws and presents risks such as money laundering, terrorism financing, tax evasion and fraud. Under the existing legal and regulatory dispensation, any person who invests in virtual currencies or participates in any transaction involving virtual currencies does so at own risk and will not have legal protection from, or recourse against, any regulatory authority.
Source: Freeman Law
The technologically-driven trend towards cryptocurrency and untraceable digital currency sectors has been operative since the late 20th century. It continues to gain popularity with modern-day money markets and economic development. This has invited the urgent need for progressive legislation and other policy frameworks to be put in place to regulate digital trading. In Zimbabwe, the existence and covert use of digital currency is hard to ignore.
The central bank has even been urged to informally embrace the crypto currency market by recruiting young, digital-savvy and virtually knowledgeable minds that can enlighten us on the trends of blockchain systems and cryptocurrency use.[1] Having said this, Zimbabwe is still relatively an infant in regard to formally adopting cryptocurrency as a legal means of trade.[2] In 2017/2018, financial and private institutions in Zimbabwe were prohibited from trading in cryptocurrency.[3] A statement was released by the Reserve Bank of Zimbabwe (RBZ) noting that virtual currencies were not recognised as legal tender.
Source: Gambe Law Group
The Reserve Bank of Zimbabwe has not authorised or licensed any person or entity or exchange for the issuance, sale, purchase, exchange or investment in any virtual currencies/coins/tokens in Zimbabwe. Exchanges such as Bitfinance (Private) Limited (Golix) and Styx24 are not licensed or regulated by the Reserve Bank.
Source: Reserve Bank Of Zimbabwe
Cryptocurrencies can be used to facilitate tax evasion as well as externalization of funds in violation of a country’s laws. Any instrument or platform that results in a flow of foreign exchange or value into and out of Zimbabwe (or between residents and non-residents), is therefore subject to approval in terms of the Exchange Control Act. The anonymity of transactions in respect of virtual currencies have the potential to result in exchange control circumvention as the transfer would not be effected and reported by an Authorised Dealer in foreign exchange.
Source:
Source: Reserve Bank Of Zimbabwe
Not applicable
As of November 2021, Zimbabwe Republic Police had received 892 complaints related to cryptocurrency scams, says spokesperson Paul Nyathi. While Zimbabwe’s laws on fraud could apply to such cases, tracing the scammers in these informal investment schemes is difficult, as they operate anonymously.
“Desperation by Zimbabweans has led them to being this gullible,” says Confidence Nyirenda, a 27-year-old Zimbabwean who since 2017 has run a cryptocurrency exchange company in Harare. “Cryptocurrency is not a get-rich-quick scheme. If it’s too good to be true, then it’s a scam.” Nyirenda facilitates cryptocurrency transactions by receiving cash and then funding the investor’s wallet with bitcoin. He says he processes about 150 such transactions a day.
Source: African Arguments
But in February 2021, when the Reserve Bank of Zimbabwe introduced a policy to support innovations in the financial sector, crypto and digital currencies were listed as ineligible for innovation. In his email, Shirichena explains that they were excluded because “crypto assets and digital currencies are novel innovations in the world of finance whose risks to the financial system are not yet fully known.”
For now, Shirichena says, the bank has adopted a “cautious approach” to “study and understand crypto assets and digital currency.” He adds that scams and fraud “should be dealt with separately by the necessary legislation.” The Ministry of Finance and Economic Development declined to comment, instead referring all inquiries to the Reserve Bank.
Source: African Arguments
Ziimbabwe has confirmed approval of capital raising solutions provider Lloyd Crowd Funding, and money transfer service Uhuru Innovative Solutions to its Fintech regulatory sandbox. This as the country prepares to publish a public consultation paper focused on Central Bank Digital Currency (CBDC).
Earlier this year, the Reserve Bank of Zimbabwe (RBZ) – which has continued to ban banks from processing crypto currency payments – announced its intention to explore a CBDC.
Zimbabwe is seeking to build on the experiences of Nigeria, the first African country to launch a CBDC, and has also noted intention by Ghana and Kenya to do the same.
Financial authorities say they have “conducted study tours to countries that are advanced in CBDC endeavours and has developed a roadmap for adoption of CBDC” in the country.
In the RBZs mid-term monetary policy statement tabled this week, Governor, John Mangudya stated: “The role of stakeholders in the CBDC journey is paramount and in that regard the Bank has developed a public consultation paper on CBDC to be released soon.
The consultation paper is aimed at “fostering a broad and transparent public dialogue regarding the potential benefits and risks of CBDC,” with the document set to be availed to the public for comments and input for a period of 90 days from the date of release.
Source: iTWeb
