Zimbabwe is in the process of establishing its first crypto regulation, a significant shift in policy following the 2018 ban by the Reserve Bank of Zimbabwe on banks processing cryptocurrency transactions.
The National Risk Assessment Coordination Committee (NRACC), appointed by the government, initiated consultations with crypto stakeholders in May 2024 to craft a regulatory framework, concluding the process in June.
The potential inclusion of licensing for crypto exchanges within this regulation is anticipated to bring legitimacy to the industry, offering a more straightforward path for businesses like fintech startup Entry to operate within clear regulatory boundaries.
To address issues stemming from the lack of regulation, the government has encouraged crypto industry participants to form lobby groups, emphasizing the need for a structured framework to prevent past financial losses incurred by citizens due to unregulated crypto exchanges like Binance, Coinbase, and Golix.
The proposed regulatory framework aims to reestablish trust in the crypto sector, as well as combat underground speculative trading and pyramid schemes that emerged post-ban, such as the reported case of a Zimbabwean ophthalmologist losing a significant sum to a crypto scam.
Recognition of crypto as a financial asset is crucial for the issuance of licenses to crypto asset service providers (CASPs), a step that could potentially facilitate the reopening of bank accounts for crypto-related businesses currently relying on alternative payment providers like PayPal and Payoneer.
The establishment of a regulatory framework is anticipated to transform the perception of the crypto industry in Zimbabwe from a “Wild West” environment to a more structured and secure space, potentially attracting more users and fostering healthy competition in the financial transaction landscape.