February 20, 2023

Zambia Tests Enabling Cryptocurrency Regulation

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Zambian Technology and Science Minister Felix Mutati said his country’s central bank and securities regulators are testing technology to enable the regulation of cryptocurrency in Zambia to achieve an inclusive digital economy. 

In statements in Lusaka, Mutati noted that cryptocurrencies are the future that the country seeks to engage in, affirming the importance of outlining a policy framework that supports this revolutionary technology, the Zambian ministry said in a press release

According to Mutati, 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.

Zambia eyes being an African technological hub by establishing appropriate digital infrastructure, luring investments in technology and creating access, the minister pointed out. 

Some African countries are currently studying rolling out their central bank digital currencies (CBDC), recent of which was the Central African Republic. 

Earlier in November, The International Monetary Fund (IMF) called for more regulation of the crypto industry and greater consumer production in African countries, according to a blog published by the global financial institution.

IMF referred to policymakers’ concerns that cryptocurrencies could be used to illegally transfer funds out of Africa and get around local rules to prevent capital outflows. The blog said: “Widespread use of crypto could also undermine the effectiveness of the monetary policy, creating risks for financial and macroeconomic stability.”

Despite being one of the fastest-growing crypto markets in the world, Africa’s crypto market is still the smallest in terms of crypto transactions reaching $20 billion per month in mid-2021, according to Chainalysis. Africa’s crypto market increased by more than 1,200% between July 2020 and June 2021, with Kenya, South Africa, Nigeria, and Tanzania leading adoption.

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