Zimbabwe is finally warming up to digital currencies and in its latest move, it plans on establishing a regulatory sandbox to foster adoption and integration. The Reserve Bank of Zimbabwe (RBZ) is in the process of drafting a regulatory framework for fintech startups, key among them digital currency firms. The sandbox will enable the companies to either launch their products independently or to partner with banks and mobile payments services providers.
The RBZ has previously sounded several warnings against the use of digital currencies. This has done little to deter the citizens from turning to Bitcoin and others, especially in the face of the country’s inflation and currency challenges. The RBZ has finally come to terms with digital currencies and accepted that they are here to stay, an RBZ top official stated. According to a report by local newspaper The Chronicle, the RBZ deputy director for financial markets and national payment systems, Josephat Mutepfa revealed that the time for regulations has come.
Speaking during a recent event, Mutepfa remarked, “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.”
He went on to reveal that once a company enters the sandbox, it will exist as an independent product that will be ready for the market, or it will be linked up with the financial companies, from banks to mobile payment services providers.
This will be just the first stage, he explained, adding, “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.”
Traditionally, the currency industry has been left solely to the RBZ. However, with Bitcoin disrupting this setting, the watchdog has to take initiative and regulate digital currencies, he stated. The young people have especially taken to digital currencies as they offer convenience and are not as easy to manipulate, he said.
In Zimbabwe, the appeal of digital currencies has been greater than in most African countries given its currency struggles. Following years of hyperinflation, the Zimbabwean government turned to foreign currencies such as the U.S. dollar and sterling pound to bring some form of stability after the local currency became grossly devalued. This didn’t help much as the underlying economic issues were still unsolved. The RBZ has tried other measures including banning mobile cash, introducing a new currency and more, but none has worked.
With this change in outlook about digital currencies, the Zimbabwean government is finally coming to the conclusion that Bitcoin might be the ultimate solution. Already, the people of Zimbabwe have shown their love for digital currencies, with local exchange Golix being among Africa’s most successful – at least before its struggles began.
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