Mainstream news outlet Chronicle has reported that Reserve Bank of Zimbabwe (RBZ), the state bank of the African landlocked nation, has revealed a financial technology framework that will oversee and regulate the industry, including crypto related firms and businesses. Faced by the ever increasing cryptocurrency and blockchain adoption worldwide, the regulator has decided to smoothen the transition and acceptance of the disruptive technology.
Deputy Director of financial markets and national payments system, said 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.” and, “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”
Zimbabwe is on the list of nations that have had a hostile attitude towards cryptocurrencies. In 2018, it had banned the use and possession of digital currencies. The ban was challenged by Golix, the largest crypto exchange in the country. Unlike their Asian counterparts in India, which eventually saw the Supreme Court ruling in favor of crypto firms, the Zimbabwe court had ruled against the Golix challange.
The Sandbox Initiative
The announcement of a crypto sandbox development by the regulatory bank is a completely opposite stance. A sigh of relief to many within the country, the decision to have a systematic and regulated adoption is a good move. Zimbabwe has been witnessing hyperinflation for a long stretch of time. It has introduced 4 different Zimbabwean Dollars, each time the latter replacing the devalued former. In 2009, it abandoned its local currency and saw the use of multiple ones, including South African Rand, Indian Rupee, Euro, USD and Pound Sterling, amongst others. Last year, it reintroduced a single currency, RTGS, which is also subject to hyper inflation.
Cryptocurrency is the Solution to Zimbabwe’s Woes
The use of Bitcoin and other digital currencies is perhaps the answer to the country’s currency valuation issues. Many cryptocurrencies, like BTC and others, are designed to be limited in supply and are deflationary in nature. The wider acceptance and use of a digital currency that is designed to rise in value just might be what the country needs.