Zimbabwe Consulting Crypto Firms To Draft Digital Asset Regulation

The government of Zimbabwe is actively seeking feedback on digital asset regulation as it embarks on creating its crypto framework while grappling with an inflation crisis. 

The country hopes to create a regulatory structure tailored to its specific needs and market conditions. 

Zimbabwe Consulting Crypto Firms

According to reports, the government of Zimbabwe has already established a committee to engage with and gather information from crypto companies offering their services in the country. The deadline for comments on its policy is June 26. The country’s Permanent Secretary for Information and Publicity, Nick Mangwana, said that the latest initiative hopes to help officials comprehensively understand Zimbabwe’s virtual asset ecosystem. He added that this would help officials evaluate the dangers of cryptocurrencies being misused for illicit activities and money laundering. 

“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, determine the nature and extent of the crypto-currency ecosystem in Zimbabwe. Given the anonymity and decentralization that characterize these digital assets, it is crucial to identify and mitigate any associated risks.”

The government hopes that consulting with crypto-focused companies can help it create a regulatory framework tailored to the country’s needs. The framework will primarily focus on balancing innovation and ensuring the security and integrity of Zimbabwe’s financial system. 

Can Crypto Ease Zimbabwe’s Financial Woes?

Zimbabwe’s quest to create a robust crypto framework comes as several countries in Africa grapple with turbulent economic situations. Zimbabwe itself is struggling with high inflation, which has had a detrimental impact on its economy. Zimbabwe’s Central bank, the Reserve Bank of Zimbabwe, introduced a gold-backed digital currency called Zimbabwe Gold (ZiG) to address rising inflation despite warnings from the International Monetary Fund (IMF). The digital currency was somewhat of a success, with the government announcing in October that it could also be used as a payment method. 

“The issuance of the gold-backed digital tokens is meant to expand the value-preserving instruments available in the economy and enhance divisibility of the investment instruments and widen their access and usage by the public.”

Zimbabwe has struggled with inflation and currency fluctuation for over a decade. After a period of hyperinflation, Zimbabwe switched to the US Dollar as its official currency in 2009. It reintroduced the Zimbabwe Dollar in 2019 in an attempt to boost a slowing economy. However, after another cycle of volatility, authorities decided to switch back to the US Dollar to control inflation. 

The Reserve Bank of Zimbabwe’s 2024 Monetary Policy statement states that the government will recalibrate its monetary policy framework to re-anchor price and exchange rate stability, helping 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.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.