The Reserve Bank of Zimbabwe proposes a regulatory sandbox plan to return to cryptocurrency.

2021-10-31

According to reports, Josephat Mutepfa, deputy director of RBZ’s financial markets and national payment system, revealed that the bank is developing a regulatory framework to provide a special regulatory sandbox for cryptocurrency-related companies.

The sandbox will help the bank determine whether a particular company can be allowed to operate independently. Musephat said at Bulawayo’s Sound and Prosperous Economic Forum:

“After entering the sandbox, you will either enter the market as a real product, or you will be led to say that you need to cooperate with banks, mobile money platforms, or your product needs to be licensed like a microfinance company.”

The decision to regulate cryptocurrency is due to its growing popularity among the younger generation of the country. Musephat said, “The asset is facing the challenge of obtaining capital.”

He acknowledged that digital currency poses regulatory challenges because currency “is the prerogative of the central bank.”

Zimbabwe’s problematic currency history

This African country is widely known for its history of hyperinflation. Since 1980, the Zimbabwe dollar has undergone three revaluations.

In 2009, Zimbabwe officially became a country without its own legal tender, replaced by a combination of several foreign currencies such as the South African Rand and the U.S. dollar.

The lack of its own monetary policy has not caused the government to relax its stance on cryptocurrencies, as RBZ issued a comprehensive crypto ban in 2018.

Since June 2019, Zimbabwe has tried again to establish its own national currency. But progress does not seem to be going well, as the local travel guide website warns that it is very difficult to obtain physical Zimbabwean dollars.

The country’s plight may be one of the reasons for the increasing number of peer-to-peer encrypted transactions. Promoting adoption through clear and concise regulations may help the country ultimately resolve its currency issues

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