The Bank of Zambia (BoZ) is finally making a stand on the increasingly popular activity of cryptocurrency trading—cryptocurrencies are not legal tender in the country.
In a statement, the central bank of Zambia said it has received an increasing number of inquiries about cryptocurrency-related activities in Zambia, specifically trading in the crypto coins.
BoZ, however, noted that despite having “some monetary characteristics,” cryptocurrencies are not legal tender in Zambia.
“Section 30 of the Bank of Zambia Act vests the right to issue notes and coins exclusively in the BoZ. To date, BoZ has not issued any form of cryptocurrency. Cryptocurrencies are not legal tender in the Republic of Zambia,” according to the central bank.
And since the bank has yet to regulate the cryptocurrency landscape, investors taking part in the crypto trade are doing so at their own risk. BoZ urged investors to be very careful while trading in crypto to avoid losing their funds to possible scammers and illegal traders in the cryptocurrency market.
“Some of [the] risks include money laundering, financing activities of terrorism and general consumer protection risks such as fraud and hacking, to which in most cases, no legal recourse would be available to customers due to the unregulated nature of cryptocurrency-related transactions,” BoZ stated.
The central bank, however, isn’t closing its doors on the cryptocurrency sector. According to BoZ, it “will continue to actively monitor all developments” in line with its “position that regulation should not constrain but enable innovation.”
Lawmakers in the African country are reportedly seeking to create a legal framework that will allow the crypto market in Zambia to grow. Currently, the country does not make much contribution to the global cryptocurrency market. Also, Zambia does not have a local cryptocurrency exchange forcing local crypto trades to rely on foreign exchanges through peer-to-peer transactions.
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