Zimbabwe is taking steps to create crypto regulations

Zimbabwe seems to have taken a U-turn from its usual view of digital currencies, as the country's central bank — the Reserve Bank of Zimbabwe (RBZ0) — recently announced that it aims to regulate the crypto industry in the country. Previously, the orders towards the crypto sector were quite hostile.

Now, however, the local news agency, Chronicle, reported that the bank is working on a draft of the new policy framework, which would help guide operations of fintech corporations. According to the report, this will also include companies that deal with cryptocurrencies.

The central banks' deputy director for financial markets and national payment systems, Josephat Mutepfa, commented on the move by saying that the bank has started working on the fintech framework because everything should be well structured in regulation. This framework, which will be a regulatory sandbox, will assess the crypto firms, and decide how they are going to operate.

Mutepfa also addressed the crypto companies, assuring them that they will be vetted under the regulatory sandbox, and that they will have to be regulatory compliant. He added that, once the firms enter the sandbox, they will either exist as a bonafide product to enter the market, or they will be guided to a partnership with a mobile money platform, a bank, or they will have to obtain licenses for their product.

He also admitted that the sandbox will be something of an experimenting zone. It will include an application criterion, which will act as the sandbox as well, to a certain capacity.

Challenges of regulating cryptocurrencies

As mentioned, the central bank's new decision represents a major change from its previous stance, as it banned all banks under its control from offering services to crypto firms back in 2018. The bank also issued warnings to its citizens against trading crypto, stating that those who choose to deal with cryptocurrencies will be doing so at their own risks.

The warnings also stressed that the banks will not be providing any legal protection if the users fall victim to scammers.

Mutepfa also pointed out multiple key challenges that crypto firms and investors are facing, despite the fact that the industry has seen rapid growth. One of the challenges lies in the fact that, in the past, the currency was prerogative of the central bank. Now, it has been taken over by cryptocurrencies, they also operate within the currency of the country, which results in minimizing loans. Another challenge, according to Mutepfa, is the interpretation of the monetary policy into all languages, so that the financial sector could reach its full potential.