Cryptocurrency regulatory tests aimed at helping Zambia develop cryptocurrency laws that mimic real-world use of cryptocurrencies are expected to be completed in June.
In an interview with Reuters on April 12, Zambia’s minister of innovation, science and technology, Felix Mutati, said the purpose of the tests was to help the government “understand what happens in the real world” to assist in the development of encryption regulations. The Central Bank of Zambia and the securities regulator began testing on February 19, which Mutati said was an attempt to balance security with innovation: “Our main goal in the cryptocurrency space is to strike a balance between innovation in digital payments and the safety of citizens, especially given how volatile cryptocurrencies are.”
Additionally, Mutati said that digital identities and other digital infrastructure need to be implemented before cryptocurrencies can be introduced. Although Zambia's debt restructuring process, much of which is owed to Chinese creditors, is "long delayed", Mutati said this has not deterred investment in Zambia. "What we're seeing is an increased interest in investing in Zambia."
Zambia was the first African country to default in 2020 at the onset of the COVID-19 pandemic. In a separate report from Reuters on April 12, the country's Finance Minister Felix Nkulukusa said the country could lose gains from macroeconomic reforms if the debt The restructuring was further delayed. When Mutati initially announced that the country would test crypto regulatory technology on Feb. 19, he said that “through digital payment platforms, people will become more involved in digital financial services.”
He added, “Cryptocurrency will be a driver of financial inclusion and a game changer for Zambia’s economy.” Many countries in the African region have recently made moves to adopt cryptocurrencies.
The Central African Republic enacted Bitcoin as legal tender in April 2022 and established a regulatory framework for the use of cryptocurrencies in the country. Despite the ban on cryptocurrency activities in 2021, the Nigerian government plans to pass a new law in the near future recognizing “cryptocurrency and other digital funds as investment capital,” reports Dec. 18.
