Zambia’s Securities and Exchange Commission (SEC) and the Bank of Zambia are working in unison to regulate digital currencies using revolutionary technology.
Technology and Science Minister Felix Mutati disclosed the plans made by the regulators in a stakeholders meeting in Lusaka, stating the importance of a policy framework for the industry. Mutati confirmed that the Zambian government holds digital currencies in high esteem as he dispelled all rumors of an impending blanket ban.
“The testing of the technology on regulating cryptocurrency will be upscaled in due course as part of deliberate measures to achieve an inclusive digital economy for Zambia,” said Mutati. “Through digital payment platforms, people will become much more included in digital financial services, and cryptocurrency will be a driver for financial inclusion and a change maker for Zambia’s economy.”
Currently, the landlocked country has seized the initiative to encourage adoption by building sustainable Web3 architecture and attracting a slew of global investors in the space. In 2018, Zambia struck an agreement with OverStock, a blockchain technology firm, that allowed the issuance of digital ownership certificates for landed properties.
“Zambia has created magnetism that attracts investments, and it is one of the countries in Africa that is becoming a must-be place for investment,” Mutati said.
Mutati confirmed that the government is increasingly leaning toward digitizing processes intending to achieve $4.5 million worth of digital payments before the end of the year. Zambia threw its hat in the ring for a central bank digital currency (CBDC) with initial experimentation into the viability of the digital iteration of its national legal tender.
Africa’s patchy relationship with virtual currencies
Digital currency adoption rates on the African continent reached their zenith in 2021 and have shown no signs of slowing down, given the array of benefits from the asset class. With several countries facing galloping inflation and poor cross-border payment options, Africa jumped aboard the digital currency train.
However, the continent’s central banks and Finance Ministries have moved against the rising adoption by passing tough policies that preclude banks from facilitating digital currency transactions.
Other countries, like Nigeria, have launched their CBDCs to counter the growth of digital currencies but have attained limited success. From 2020 until today, Africa’s digital currency market has grown by over 1,200%, led by Nigeria, Kenya, and South Africa.
Watch: Blockchain in Africa
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