Eager to regulate cryptocurrencies, the Reserve Bank of Zimbabwe (RBZ) has begun drafting a new framework that will “guide operations” of crypto and other fintech businesses.
Mr. Josephat Mutepfa, deputy director for the financial markets and national payments system of the RBZ, issued a statement revealing this plan during the Sound Prosperity Economic Forum.
“We have already started to come up with a fintech framework because in regulation everything should be well structured. The framework, which is a regulatory sandbox, will be assessing the crypto-currency companies as to how they are going to operate.”
“Once you enter the sandbox you either exist as a bonafide product to enter the market or you are guided to say that you need to partner a bank, a mobile money platform or your product needs to be licensed like a microfinance company,” Mutepfa said.
“The sandbox will be an experimenting zone. Once the sandbox is there, there will be an application criterion, which will also act in the same capacity as the sandbox,” he added.
Why did the RBZ venture into crypto again?
This move follows the surge in the demand for Bitcoin and other crypto and fintech developments that capture industries like trading, payments, and insurance. While the RBZ feels that the use of cryptocurrencies and unregulated exchanges can be vehicles of deceit, regulating its use can limit that possibility.
Mutepfa believes that the increasing interest for the young generation to tap the cryptocurrency market is there for a reason. The traditional financial market imposes strict capital barriers that not every constituent can meet. Cryptocurrencies and other blockchain-related efforts do not. This barrier deprives people from tapping on the innovations brought about by cryptocurrencies.
How are they finalizing the framework?
RBZ is working with the private sector to finalize the fine print for the regulatory framework. This should help invite more people to venture into cryptocurrencies as well.
According to Brian Maseva, business advisor at a local crypto-trading consortium SPURT:
“Meeting with the central bank will help us grow and attract the public to join the digital currency, which is fast taking over the financial sector. We are now aware that there is a policy, which elaborates more on fintech guidelines that we need to follow.”
How has the stance of the RBZ changed towards cryptocurrencies?
As many may recall, the RBZ was initially against cryptocurrencies. In 2018, the RBZ moved to impose a complete ban on cryptocurrencies. It did not matter much that they removed their own fiat currency in 2009. They had recent efforts to re-establish a new Zimbabwean currency.
Some people are still skeptical about whether it will be easy to get Zimbabwean dollars, if ever. It is this uncertainty over the future of native currencies that could have possibly shifted people’s interest towards cryptocurrencies.
Images courtesy of Pixabay, Nehanda Radio