The Zambian government is currently conducting tests on cryptocurrency regulation that simulates the real-world use of crypto and aims to help shape crypto laws in the country. The tests are set to finish by June according to Zambia’s innovation, science and technology minister, Felix Mutati. The purpose of the tests is to help the government “see what would happen in the real world” and assist in forming crypto regulations.
Zambia’s central bank and securities regulator initiated the tests on February 19th with Mutati saying that the tests were looking to balance safety and innovation. The main goal in the area of cryptocurrency, according to Mutati, is to strike a balance between innovation in terms of digital payments that is safe for citizens, particularly given that cryptocurrency is very volatile. Moreover, Mutati stated that before cryptocurrencies can be introduced, digital identities and other digital infrastructures need to be implemented.
Zambia’s debt restructuring process has been “long delayed,” however, as the largest portion of its debt is owed to creditors from China, it has not deterred investment in the country. According to Mutati, “What we are seeing is increased appetite to invest in Zambia.”
At the start of the COVID-19 pandemic in 2020, Zambia was the first African country to default. In a separate Reuters report, the country’s Treasury Secretary, Felix Nkulukusa, said the nation could lose the gains it achieved from its macroeconomic reforms if the debt restructuring continues to be delayed further.
When Mutati initially announced that the country would be testing technology for crypto regulation on February 19th, he stated that “through digital payment platforms, people will become much more included in digital financial services.” Mutati added that “cryptocurrency will be a driver for financial inclusion and a change maker for Zambia’s economy.”
Many countries in the African region have been moving towards crypto adoption. The Central African Republic made Bitcoin legal tender in April 2022, along with a regulatory framework for the use of cryptocurrency in the country. According to recent reports, the Nigerian government plans to pass a new law in the near future that will recognize “cryptocurrency and other digital funds as capital for investment,” despite banning crypto activity in 2021.
As technology advances, it becomes necessary for governments to keep up and adapt to new technology for the benefit of their citizens. Cryptocurrency and blockchain are fast-moving technologies that are revolutionizing the way people do business and transact online. Cryptocurrency regulation is still a relatively new field, but as governments begin to experiment with blockchain technology, the path to implementation will become clearer. It’s encouraging to see that Zambia is taking the necessary steps to understand cryptocurrency regulation and implement laws that balance innovation and safety for its citizens.
In conclusion, Zambia’s tests on cryptocurrency regulation are a significant step forward towards understanding how cryptocurrency can be regulated effectively while balancing the need for innovation and citizens’ safety. The tests’ success would help shape laws and regulations that would benefit the Zambian economy by enabling innovation, encouraging investment, and promoting financial inclusion. It would also set an example for other African nations and the world at large, showing that effective cryptocurrency regulation is possible and essential for economic growth and development.
