Zimbabwe seeks global input on its crypto regulations

The Zimbabwean government is developing new regulations for its cryptocurrency industry and is asking for input from crypto service providers both in Zimbabwe and internationally. A committee has been set up to gather information from these businesses, with a deadline of June 26 for comments.

Also Read: Zimbabwe’s New Gold-Backed Currency Blighted by Trust Issues

Nick Mangwana, the Information and Publicity Permanent Secretary, said the goal is to understand the virtual assets ecosystem in Zimbabwe. This includes mapping out the various actors and activities within the space to get a clearer picture of its scope and scale. This is in line with global trends and best practices.

Zimbabwe assesses crypto’s risks and opportunities

Mangwana explained that the government wants to assess the potential risks associated with cryptocurrencies. “Our objective is to evaluate the dangers of misusing cryptocurrencies for money laundering, terrorism financing, and other illicit activities. Given the anonymity and decentralization that characterize these digital assets, it is crucial to identify and mitigate any associated risks,” he said.

This study will also help develop a regulatory framework tailored to Zimbabwe’s needs. Mangwana added:

We intend to recommend an appropriate regulatory framework for cryptocurrency and cryptocurrency service providers. This framework will aim to strike a balance between fostering innovation and ensuring the security and integrity of our financial system.

Since 1999, Zimbabwe has been locked out of international capital markets due to defaulting on its debts. The country is trying to reorganize about $19.2 billion owed to creditors, including $13 billion to international investors. The statistics agency began computing inflation with ZiG as a base in May.

Zimbabwe faces financial turmoil

Last year, Zimbabwe introduced a gold-backed virtual token to end decades of financial chaos. In April, the country launched a new currency called ZiG, short for Zimbabwe Gold. This was the sixth attempt in 15 years to have a functioning local currency. The new currency replaced the Zimbabwean dollar, which had crashed multiple times since reintroduced in 2019, causing inflation to rise.

Also Read: Zimbabwe turns to gold in efforts to permanently ditch US dollar

In a New Year message, President Emmerson Mnangagwa said everything was shaping up for a prosperous Zimbabwe. However, he acknowledged the challenges faced by the economy. “We are in an agro-based economy. We sneeze when the agriculture sector catches a cold. This year there is a drought, which will have a devastating impact on the economy. We will be importing food because of the Russia-Ukraine war, which has driven global food prices up by around 50%,” he said.

Cryptopolitan reporting by Jai Hamid