Cryptocurrency regulation testing aimed at shaping crypto laws in Zambia, and simulating real-world use of crypto, is expected to be concluded by June.
In an April 12 interview with Reuters, Zambia’s innovation, science, and technology minister, Felix Mutati, explained that the tests are being conducted to help the government “see what would happen in the real world” and to assist in the formation of crypto regulations.
Zambia’s central bank and securities regulator began the tests on February 19, with Mutati stating that they were looking to achieve a balance between safety and innovation. He said:
“Our main goal in the area of cryptocurrency is to strike a balance between innovation in terms of digital payments […] against citizens’ safety, particularly given that cryptocurrency is very volatile.”
Meanwhile, Mutati also highlighted that before cryptocurrencies can be introduced, it is necessary to implement digital identities and other digital infrastructures.
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Although Zambia’s debt restructuring process has been “long delayed” with the largest portion of its debt owed to creditors from China, Mutati suggested it had not deterred investment in the country:
“What we are seeing is increased appetite to invest in Zambia.”
Zambia became the first African country to default at the start of the COVID-19 pandemic in 2020. In a separate report from Reuters on April 12, the country’s treasury secretary, Felix Nkulukusa, warned that the nation could lose the gains it achieved from its macroeconomic reforms if the debt restructuring is delayed further.
We continue engaging people on how we can achieve digital financial inclusion. pic.twitter.com/twoMnmI4BK
— Felix Chipota Mutati (@ChipotaFelix) April 6, 2023
When Mutati announced the country’s plans to test technology for crypto regulation on February 19, he stated that “through digital payment platforms, people will become much more included in digital financial services.” He added that “cryptocurrency will be a driver for financial inclusion and a change maker for Zambia’s economy.”
Several countries in the African region have recently made moves toward crypto adoption. In April 2022, the Central African Republic made Bitcoin legal tender, and it created a regulatory framework for the use of cryptocurrency in the country. In December 2022, it was reported that despite banning crypto activity in 2021, the Nigerian government plans to pass a new law soon that will recognize “cryptocurrency and other digital funds as capital for investment.”
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